- Today I do not encounter any questions from foreign investors whether one should dare to own Swedish government securities, assets or the Swedish krona.
They think that things are going quite well for Sweden, quite simply, says Robert Bergqvist who is SEB's senior economist.
He summarizes the so-called market's view of Sweden today.
The political turmoil has passed with a yawn.
It was different before when Sweden had major concerns with budget deficits in the central government budget and high debt.
Then a government crisis would surely have affected the stock market, for example.
"Will see more short-term policy"
But behind the great calm in the market lurks a danger in the slightly longer term, according to Robert Bergqvist.
- A weak domestic policy situation in Sweden means that we will see a more short-term economic policy.
This reduces the number of long-term decisions, which makes it more difficult for companies and individuals to make long-term decisions.
The uncertainty costs.
Even if we do not have to pay a price for this domestic political uncertainty in the short term, I believe that there is a long-term price in the form of lower growth, says Robert Bergqvist.
A government with weak support in the Riksdag is forced to devote more energy to piloting a budget in the Riksdag and to a lesser extent devoting itself to broad long-term agreements.
It can be about making green investments, investments in education, for example.
But it can also be about building stable rules of the game, such as trying to push through a new tax reform, he reasons:
- We would need an overall tax reform, but there I assess that it will be more difficult to get through one with today's uncertain political situation.