Sweden's government has lowered its outlook for economic growth in 2026, citing a deterioration in household sentiment tied to ongoing conflict in the Middle East. The finance ministry's updated projection, released Wednesday, sets growth at 2.8% for 2026, a reduction from the 3% estimate published in December.
Finance Minister Elisabeth Svantesson presented the revised numbers at a news briefing in Stockholm. Svantesson framed the change as a response to developments beyond Sweden's borders. "As a country, our conditions are good for a continuing recovery," she said. "But when we look beyond our borders, geopolitical tensions are shaping the world economy right now."
The ministry's assessment links the downward revision to growing caution among Swedish households as the conflict in the Middle East continues. That weakening of consumer confidence is the central factor cited for the adjustment to next year's growth forecast.
Although the estimate for 2026 has been trimmed, the finance ministry observed that a 2.8% expansion would still be the most rapid pace of growth seen in five years. This would follow the 1.5% increase recorded in the previous year.
The update underscores the government's view that domestic conditions remain supportive of recovery, while external geopolitical pressures are creating uncertainty for consumers and, by extension, the economy. The ministry's forecast and Svantesson's comments reflect the limited scope of the revision: a modest downward movement in the projected growth rate, attributed specifically to shifts in household sentiment linked to the geopolitical situation.
Clear summary
The finance ministry now expects Sweden's economy to expand by 2.8% in 2026, reduced from a 3% forecast in December. The revision, announced by Finance Minister Elisabeth Svantesson, is attributed to weaker household confidence amid the ongoing war in the Middle East. Despite the cut, the projected rate would still be the fastest in five years after last year's 1.5% growth.