LO-borgen, Ola Pettersson, chefsekonom på LO. Foto: TT
Ola Pettersson, chefsekonom på LO. Foto: TT

Union group predicts weaker growth

Economists from the Swedish Trade Union Confederation warn that the nation is facing a period of weak growth over the next two year and that heavy investment is need to revive the economy, reports news agency TT.

"The development in the world at large is expected to continue along sluggishly, monetary policy has reached the end of the road, and financial policy is slightly strict," they write in their autumn 2014 report, the title of which translates to "Economic Outlooks."

The trade union confederation expects weaker economic development over the next two years than what both the government and the Central Bank have forecast. The confederation predicts that Sweden's GDP will hover around 2.1 percent next year and rise to 2.3 percent the following year. They also believe unemployment will continue to remain high at 7.6 percent, while the government has said it will sink to 6.7 percent.

The confederation suggests that politicians stimulate the economy by investing SEK 70 billion, in order to get more people into work, a measure the economists say would result in 2 percent less unemployment.

"This is extremely serious, and goes together with the fact that we, internationally, have an extremely protracted recession, and it's especially bad in our large export markets in Europe," says Ola Petterson, the confederation's head economist. "I have trouble seeing that we, since the Second World War, have had a stronger reason to stimulate, via public investments, than what we have today."

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