Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
The Nordic countries (Sweden, Norway, Denmark, Finland, and Iceland) comprise the world’s 11th largest economy (estimated GDP of U.S. $1.53 trillion in 2020), and are among the most innovative, competitive, and transparent in the world. Sweden, with a GDP of $537 billion (2020) and a population of 10.4 million, is the largest Nordic economy and boasts a transparent, highly developed, sophisticated and diversified market with few barriers to entry. According to the World Economic Forum’s Global Competitiveness Report for 2019, Sweden ranks 8th in the world on the Global Competitiveness Index (The 2020 rankings have been paused due to Covid). This is due in part to Sweden’s export-oriented manufacturing sector, competitive small and medium-sized enterprises (SME), and budgetary discipline. Sweden also consistently ranks among the top 10 worldwide for its connectivity, governance, investment in R&D, and business climate. As such, many foreign firms establish operations in Sweden when looking to enter or expand into the Nordics and/or the Baltics.
In 2020, U.S. merchandise exports to Sweden were valued at $4.77 billion and imports were $12.37 billion, generating a trade deficit of $7.60 billion. The U.S. exported $4.95 billion in services to Sweden in 2020 and imported $2.97 billion, generating a trade surplus of $1.98 billion. Major categories of U.S. exports to Sweden include aerospace/defense, automotive aftermarket, telecommunications equipment, healthcare/life sciences, information technologies, safety/security, clean-tech, industrial machines, and renewable energy.
Sweden’s national strategy has focused on attempting to slow the spread of infection through voluntary public health restrictions, such as social distancing, protecting the elderly, and ensuring its health care system maintains adequate intensive care capacity. Sweden never mandated the wearing of face coverings, leaving it only as a recommendation in certain circumstances, and mask-use in Sweden is rare. Primary schools, restaurants, and fitness centers have remained open throughout most of the pandemic.
Based on recent GDP growth figures and other economic indicators, economic analysts now assess that Sweden’s economy is on track to reach pre-pandemic levels by mid-2022. Finance Minister Magdalena Andersson recently revised 2021 GDP growth estimates upwards from 3.2 percent to 4.7 percent, and other leading forecasters have done the same. These upgraded estimates depend on the resolution of global supply chain problems and shortages, which are hampering the recovery. The pandemic has contributed to a rise in long-term unemployment despite the short-term unemployment rate falling to 7.9 percent as an effect of the ongoing recovery. The success of Sweden’s recovery is also inherently linked to the fiscal, monetary, and pandemic-related developments among its key trading partners.