Economic surveys and country surveillance

Economic Survey of Sweden 2008: Executive summary

 

Contents | How to obtain this publication | Additional information

The following is the Executive summary of the OECD assessment and recommendations, taken from the Economic survey of Sweden, published on 3rd December 2008.

 

Contents                                                                                                                             

Thanks to strong economic institutions and fundamentals, Sweden is well prepared to cope with fall-out from the global financial crisis. The cycle has turned and, clearly, the key near-term challenge is to steer through the slowdown without jeopardising longer-run macroeconomic stability.


With sound structural reforms, material living standards have risen strongly in Sweden over the past 10 to 15 years. Market opening has boosted productivity growth, and recent reforms have curbed labour market exclusion and benefit dependency. The relative decline of previous decades is gradually being reversed. This Survey focuses on how to further promote economic growth while preserving social cohesion and examines the following policy challenges:


Keeping fiscal policy on a sustainable track and continuing tax reforms to promote growth. The ample fiscal surplus and relatively low public debt allow for some policy easing, but the fiscal framework should be strengthened by linking targets more clearly to long-term considerations. Sweden used to have the highest tax-to-GDP ratio in the OECD but has started to move down the list. The challenge now is to continue with tax cuts, focusing on the worst impediments to growth resulting from corporate and personal income taxation – with due regard to equity concerns.


Improving education and employment outcomes for youth. Despite a high overall employment-to-population ratio, youth unemployment is widespread. One reason is that with a high wage floor and stringent employment protection rules, strong skills are required to get a regular job. The quality of compulsory school can be improved, especially regarding mathematics and science. Upper secondary education could make youth more “job ready”, notably via more work-place contact. Students should complete higher education and enter the labour market earlier. Universities could benefit from more freedom to develop, possibly based on tuition charging. But in the end, disproportionate youth unemployment can probably only be overcome if also addressing the core labour market rigidities.


Taking privatisation further. Starting with a large portfolio of government-owned enterprises, it was easy to identify a list of first candidates for sale. Going forward, privatisation will have to be taken further in those numerous areas where societal objectives are better served by open but regulated markets rather than by public ownership.

 

How to obtain this publication                                                                                   

The Policy Brief (pdf format) can be downloaded in English. It contains the OECD assessment and recommendations. A Summary in Swedish (pdf format) is also available.

The complete edition of the Economic survey of Sweden 2008 is available from:

 

Additional information                                                                                                  

 

For further information please contact the Sweden Desk at the OECD Economics Department at eco.survey@oecd.org.  The OECD Secretariat's report was prepared by Jens Lunsgaard and David Turvey under the supervision of Vincent Koen. Research assistance was provided by Roselyne Jamin.

 

 

 

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