On Thursday morning, the anti-Islamic Freedom Party led by Geert Wilders looked set to win 20 seats, far behind the centre-right VVD led by Prime Minister Mark Rutte, which was set to win 33 seats.
This is being seen as a huge disappointment for Wilders, who recent polls had suggested would win as much as 25% of the vote. He secured only about half of that amount on election day.
Jan Björklund, leader of Sweden's Liberal Party said that the election showed the rise of populism had come to an end.
"What has happened, I believe, is that this international wave, which many thought would continue after Brexit and Trump and go from country to country....it can very well be said that this wave has peaked."
Foreign Minister Margot Wallström said that the Dutch people had "voted out populism and instead voted for an inclusive and open society."
But the head of Sweden's own populist party, the Sweden Democrats, said that the election should be seen as a step forward for Wilders.
Jimmie Åkesson said: "This is progress even if seen from the perspective of the recent months' opinion polls, it's not the fantastic increase which one had perhaps been counting on."
"My analysis is that the ruling party to a large extent adjusted its politics to that of the Freedom Party when it comes to immigration."
Karin Enström, the foreign policy spokesperson for the opposition Moderate Party told TT that the election should be seen as a blow for social democracy, given the disappointing result for the Dutch Social Democratic Party.