Monday , September 26 2022

Bank predicts higher wage growth – Sydsvenskan


While the Swedish economy is expected to lose momentum, the labor market remains strong. If more jobs are expected, lower unemployment and better wage growth next year, Handelsbanken predicts in its new economic forecast.

Economists of Handelsbanken predict a strong labor market.picture: Henrik Montgomery / TT

A cooler world and a truly braked residential real estate market. These are some of the reasons why the economy, both in the world and in Sweden, will peak this year.

"In short, the GDP projection for 2018 has been greatly changed," says Handelsbanken. However, the slowdown will take place gradually, but it is still a good step in the Swedish economy with strongholds. Swedish GDP is expected to increase by 2.6% this year and 2.0% next year, according to the Bank's rating.

Despite this, it is expected that employment will continue to grow and unemployment will further decline to 6.3 percent next year, which raises the rate of wage growth, predicting bank economists.

This leads to higher inflation and the Riksbank will therefore raise the key rate in the winter with continued growth, and by the end of 2019 will reach a plus of 0.25 percent.

"Employment has risen sharply and now that the boom is in the long run, we expect wages to grow faster, reflecting a slightly higher base inflation," said bank economists.

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