Inflation in Sweden is higher than it has been in many decades and Swedish households' confidence in the future economy is currently the lowest since KI began measuring in the mid-1990s.
- Households' image of the economy is really bad, then it is not necessarily the case that the economy has developed as badly as households fear, says Albin Kainelainen.
Reduced purchasing power
KI's latest report describes how households' purchasing power will decrease in the coming years.
Higher prices, rising interest rates and falling house prices mean that Swedes will not be able to afford to consume as many goods and services as the year before.
- For the first time in a long time, we will now see falling consumption among households.
The forecast is precisely a forecast, says Kainelainen.
No one can be completely sure of the economic development.
- But we see many signs.
We are seeing a global decline of a similar kind.
That it will be tougher in 2023 than it was in 2022 speaks volumes.
Inflation will fall in 2023
But it can relatively soon turn upwards again.
Inflation is expected to fall in the coming years and is predicted to land below 2 percent at the end of 2023.
- Then it takes another year or so for the economy to find balance again, says Albin Kainelainen