Macroeconomic imbalance in Sweden

With respect to macroeconomic imbalances, Sweden seems currently well positioned and comparatively little exposed. A low budget deficit means the risk of fiscal austerity measures and/or a sovereign debt crisis is very remote, while the large current account surplus and low inflation environment point to favourable external competitiveness, especially with regard to Southern European crisis countries.

Economic Disparity in Sweden

In terms of economic disparity, the Nordic countries are relatively homogenous and fare well, especially when compared to their Western European peer group. The Nordic economic and political model, with its high taxes and comprehensive social security systems, is clearly effective in dampening the European trend towards greater income and wealth inequality. But the flip side of the coin is the strong exposure to demographic shifts, such as an aging population, which make pension and social security benefits at current levels unsustainable. An exception is Norway, which can use its sovereign wealth fund to fulfil its pension liabilities and social security obligations.

NOTE The risk bars indicate the world distribution of the particular risk, from the lowest scoring country to the highest. The lower the score, the lower the risk or exposure to the particular indicator (i.e. a lower score is always positive).

All data is sourced from Zurich Risk Room