Löfven’s comments to Swedish Television came a day after two Russian warships passed through the Baltic Sea.
“Their actions in Ukraine and increased tension in the Baltic Sea is the reason that we are also raising our military capacity and putting more resources into defence,” he said.
“There is undoubtedly a growing concern in the world, but at the moment it is quite important to consider how to contribute to an easing of tensions.”
Defence Minister Peter Hultqvist had described the presence of the two Russian warships as “worrying”, while Liberal politician Allan Widman told Swedish Television there was a “real risk of war”.
Löfven said Sweden had not been threatened directly and it was important to not make what has happened sound so dramatic.
Hultqvist is currently in Brussels to meet NATO, whose 28 members are currently holding a meeting.
On Wednesday, NATO’s Secretary-General Jens Stoltenberg confirmed that there will be four “combat-ready” battalions of 4,000 troops based in Latvia, Lithuania, Estonia and Poland early next year.
“NATO does not seek confrontation with Russia. We don’t want a new cold war and we don’t want a new arms race and therefore, what NATO does is defensive and it is proportionate,” Stoltenberg said.
“At the same time, NATO has to react when we, over a long period of time, have seen substantial military build-up by Russia and we have seen them modernise their military capabilities and most importantly, we have seen them willing to use military force against neighbours.”
He said the aim was to prevent a conflict, not provoke one, through a “strong, united” and firm response.