The National Institute of Economic Research (NIER) said on Thursday that its Economic Tendency Indicator fell for a fourth consecutive month, from 96.4 in July to 94.9 in August. The main reason for the decrease was a further decline in manufacturing confidence, which has dropped more than 25 points in the past year.
The indicator is now at its lowest level since shortly after the 2010-2012 eurozone debt crisis, comments business daily Dagens Industri. Now, as then, Sweden’s export-reliant economy is burdened by world events, which in turn is likely to make life harder for the central bank, the Riksbank. Plans to raise the benchmark repo rate at the end of the year could be dashed and a further cut in interest rates is becoming more likely.
Social Democratic Energy Minister Anders Ygeman has said the government understands the concerns expressed by E.On and others about Sweden’s power supply but does not totally agree with their findings. “Sweden had the largest electricity surplus in the first half of the year, and the forecasts point to a continued, growing surplus despite the closure of several reactors,” he said.
Nonetheless, the minister says he is prepared to hold constructive talks with other political parties and the power industry to tackle regional bottlenecks and power supply shortages.
He has dismissed power companies’ criticism of tax hikes, which recently forced E.On to close a natural gas-fuelled combined heat and power facility in Malmö, saying the firms have made “offensive gains” instead of investing in the grid.
Finance Minister Magdalena Andersson has signalled an increase in environment taxes in the autumn budget but a number of proposed tax cuts will be delayed. Nordea chief economist Annika Winsth is highly critical of the way in which the green tax shift is being implemented, saying the measures are inadequate.
In order to accelerate the transition, companies need to be involved, and then it is about developing long-term instruments that really make a difference.
“Other countries in Europe, such as France, have come much further on these issues. Global, long-term thinking is key. In Sweden, there is a lot of political symbolism and as a government you need to have far greater ambitions than that,” she remarks.
Tax shifting should include balancing taxation levels to be revenue-neutral, so voters are likely to feel they have been conned if this does not happen, warns the economist.
Technological advances are changing the world’s labour markets and lifelong learning will be essential to help workers adapt, finds the Organisation for Economic Co-operation and Development (OECD).
“We believe that 14 per cent of jobs will disappear completely in the next 10-20 years, but slightly more than 30 per cent will change dramatically. It can be a difficult transition and create gaps,” said OECD economist Stijn Broecke at a seminar organised by the government on Monday,
The long-term trend within the OECD is that more people have jobs and higher salaries, but Stijn Broecke believes the next technological advance will be tougher, pointing out that 60 per cent of people in the OECD lack basic online skills. “We will need to focus most on those who have the worst conditions - it is about education but also about creating social safety nets for those who fall outside. This is a responsibility for the individual, employers, politicians,” he said.
Stena Bulk, which owns the Stena Impero, is cautiously optimistic about reports that the seized tanker could be released within days. Nevertheless, efforts to free the vessel and its crew continue, with letters being sent to Russia’s President Vladimir Putin and India’s Prime Minister Narendra Modi, reveals Stena CEO Erik Hånell.
“We have Indian and Russian crew on board, and we hope that these large countries, with their influence and relations with Iran, can help speed up its release,” says the CEO.
Writing in Dagens Industri (DI) today, Liberal defence policy spokesperson, Allan Widman, states that on 10 May, the centre-right members of the Defence Commission held a press conference because the Social Democrats and the Greens had admitted that the financing of the Commission’s proposals was not backed by the government.
Now, as the government presents the budget proposal, there is huge interest in the direction of defence allocations, he writes. All objective and strategic logic indicates that the government will bend on the issue.
“Given the rise in defence allocations that are being approved around Europe and in our neighbouring countries, Sweden must also show that we take the worsened security situation seriously. The signals are clear: Those who do not take care of their own security, cannot count on help from others.”
“It is my conviction that the armed forces will get the funding the Defence Commission has proposed.”
Handelsbanken has assessed that Swedish growth will halve next year and unemployment is already up this year. Concerns about trade wars and Brexit were already casting shadows before the summer and these are likely to continue.
The bank’s head economist Christina Nyman also indicates an abrupt decline in the National Institute of Economic Research’s (NIER) Sweden barometer which looks at industry’s production plans and business investments. “Sweden’s slowdown is coming slightly earlier than we had expected,” she says.
She underscores the risk of more negative developments with an escalating trade war and perhaps also a hard Brexit. Sweden’s slowdown would turn to a sudden stop if the tariffs between the US and China were to increase to 25 per cent on all goods and if the US fulfils its threat about car tariffs against Europe and Japan.
“There is a risk we are down to zero growth in Sweden in 2020,” she says.
H&M was launched on the Indian e-commerce trading platform Myntra on Tuesday.
Initially there were around 8,500 products available and, according to several Indian media reports, the intention is to increase this to around 15,000.
The launch follows the plan H&M announced in March.
Dagens Nyheter (DN) also reports the company is to begin renting out clothing as a part of what is being described as a “circular fashion future”.
“We want to encourage our customers to have a different relationship to how they consume clothing,” says Amanda Larsson, press contact for H&M Sweden.
The service is being launched for members at the opening of a new flagship store at Sergels Torg in Stockholm.
A female economist earns almost 12 per cent less than her male colleague and the trend is going in the wrong direction, according to an analysis from the union, the Swedish Association of Graduates in Business Administration and Economics. Even when the statistics are adjusted because men are, on average, older, have more senior positions and that women largely work in the public sector, female economists earn 11.6 per cent less than men.
Four years ago, the difference was 10.7 per cent, according to a press release from the union.
The trade war between the US and China could benefit the Swedish solar cell market as the industry has been pulled into the war. Last year, the US put tariffs of 30 per cent on imports of solar cells, which primarily hit China. And recently, the US announced that new tariffs of 10 per cent were planned for selected Chinese imported goods.
“According to market analysts, the American tariffs are already seeing large volumes being redirected and swarming into Europe,” says Johan Öhnell, chair of Solkompaniet, one of Sweden’s leading solar cell companies.
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