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Johan Schück: the Weaker the economy becomes a concern for the next government

the national institute of economic Research, KI, draw a darker picture than before in its new forecast. Growth in the Swedish economy is about to slow down and is expected to be only 1.3 per cent in 2019, against 2.2 per cent in the year.

the Unemployment rate has reached a record low in 2018 at 6.3% and will then over a period of five years, gradually rising to 6.8 per cent. The increase starts next year.

such A reversal in the economic cycle have already been able to have on the feel. But the key to KI is that the development was so weak during the third quarter of this year. Then reduced gdp by 0.2 per cent compared with the previous quarter.

than expected and may have repercussions also forward in time. KI adjusts the now down its forecast significantly, when it comes to household consumption during the 2018 and investments in 2019. Housing construction drops already and the decline continues over the next year.

Much of the forecast is uncertain, particularly international developments. It comes to Brexit, where it is still unclear how the british EU exit should go to. To the uncertain belong also the threat of a global trade war, as well as the danger of a hard landing in China and for new crises in the euro area.

But also without such drama is expected in konjunkturdämpning also globally. For the Swedish part, it means that the exports are increasing at a slower rate and that interference can come from outside.

a reasonably manageable situation. But if it would get worse, the government and the Riksbank, not so much the response to put into.

According to the institute's door for an active fiscal policy in the next closed, if a new government should adhere to the established the surplus target. The space in 2019 is almost entirely mortgaged, then the parliament has given its assent to the Conservatives and the christian democrat income tax cuts.

on to gradually raise the repo rate, can't do much. KI believe that the first rate hike will come in February and is then followed by a few more. The space for that in an emergency, do the opposite and instead reduce the rate of interest is very limited, when this is already on the minusnivå.

this should not come as any major surprise. But before the election spoke the politicians in all the parties at any time if the other than an upcoming economic downturn and risks in the global economy. Now begins the reality make itself felt.

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