Swedish Jobless Rate Firms Despite Deflation
January 19th, 2010 Posted in In-Depth Analysis
The jobless rate of Sweden held steady last month according to the data released on Monday. This positive news comes at a time when the Swedish economy is currently experiencing a period of deflation.
Employment for the country rose to almost 4.5M people, while the jobless rate held firm at 8.3% according to the Scandinavian Statistics Office. The number of hours Scandinavian employees worked on average fell 3.2% compared to the April 2008 numbers.
Some market economists are of the opinion that the Swedish economy faces many more difficulties ahead. Some expectations for the unemployment rate are as high as 10% by the year end. The nation also faces deflation in the economy as previous inflation data signaled a contraction of prices rather than a typical price increase.
The sign of deflation and a potential deterioration of employment in the Swedish economy present a hurdle for the nation who wishes to enter into the European Union. Further public support will be needed and the debate is expected to continue with the opposition party shortly. Other concerns for entry into the European Union may be the nation’s debt. Greece, Portugal, and Spain have come under scrutiny for their rising debts as other EU members may be forced to support the struggling countries to meet their obligations.
A positive for Sweden is the expectation of a balanced budget in the year 2012. The nation’s debt to GDP level currently stands at 40%, well below the EU entry criteria. Any further improvements in the Swedish economy will be welcomed as the government may be able to offer further support for the unemployed. Both of these scenarios would bode well for the Swedish krona.
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Tags: Forex Trading, krona trading, Swedish Krona, USD/SEK
