A Volvo car displayed at a fair, people watching.
Volvo Cars is one of the big companies in Sweden. How are they affected by the inconclusive election result? Not so much, according to the political editor of the Swedish Business daily Dagens Industri. Credit: AP

Business reacts to political uncertainty

3:36 min

Fears that the unclear outcome of the election would lead to a weak government are being played down by economists and experts in Sweden.

In an interview with the Financial Times  the chief executive of Volvo Cars, Håkan Samuelsson, said that the election result makes it difficult to "foresee an outcome that delivers the stable leadership necessary" to address reforms of the labour and housing markets as well as the integration of immigrants.

The paper notes that this comes after already eight years of minority governments in Sweden.

But Swedish Radio has spoken to several economists who are more optimistic. The unclear outcome will force the parties to negotiate over the political divide, and therefore, it may be easier to reach agreements over structural reforms on tax and housing market, the economists said.

PM Nilsson, political editor of Sweden's business daily, Dagens Industry, told Radio Sweden he does not think that Swedish businesses or financial markets are worried about the situation.

"The budget deficit in Sweden is so low, it is like 20 percent of the GDP... So, even if we had an extremely weak government, that couldn't take care of the situation.. and if it would go up to, say, 30 percent of the GDP, it wouldn't be a disaster for Sweden," he told Radio Sweden. 

"So I think, the financial situation, and the situation out there in the companies, could handle a weak government, even in an economic crisis," PM Nilsson said.

Our journalism is based on credibility and impartiality. Swedish Radio is independent and not affiliated to any political, religious, financial, public or private interests.
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