Household income growth expected to slow

Irrespective of who will win the election, growth is expected to slow down in Sweden, according to Nordea bank's economic outlook.

The households' consumption is driving the Swedish economy, and partly outweighs the lower-than-expected export figures. But according to Annika Winsth, chief economist at Nordea, the golden years have soon passed.

"We are entering a period where irrespective of who wins the election we will see tax increases instead of tax cuts. The household income will develop somewhat slower," she told Swedish Radio.

The bank is expecting a 2 percent growth of the country's GDP this year, down from a prognosis of 2,7 percent growth from before the summer.

But despite tax increases, the households are strong and the low interest rates mean that mortgages are manageable for the households.

In July, Bank of Sweden surprised many when it lowered the key interest rate to 0,25 percent. A new meeting will be held on Thursday to make a new decision, but Annika Winsth says they expect the Bank of Sweden will keep the rate at its low level.