Job Scheme Cuts to Boost Unemployment

The state labour market board AMS released a forecast Tuesday which is one of the first to show the impact of reforms planned by the Moderate-led centre-right coalition government.

According to AMS, Swedish unemployment will rise next year as the government cuts state labour schemes but the surging economy is expected to generate thousands of new jobs.

AMS forecast unemployment rising to 5.4 percent next year, up from a May forecast of 4.6 percent and from 4.0 percent in October this year. The number of people on job schemes would be cut by a third to 90,000 in 2007, equivalent to 1.9 percent of the workforce versus 3 percent in 2006. While headline unemployment would rise, however, the combined total of jobless and people on job schemes – often involving training – would fall sharply in 2007 to an expected 7.3 percent from a forecast 8.4 percent in 2006

”The Swedish economy is very strong and pretty much all sectors in the country are growing,” AMS chief Bo Bylund told a news conference.