Momentum for structural reforms to further improve Sweden’s economic performance seems to have slackened. To some extent, there may be some reform fatigue following the wide range of policy changes that have already been enacted since the economic crisis of the early 1990s. The growth rate of annual total factor productivity had risen by around ½ percentage point by the end of the 1990s, boosting potential output growth. A pick-up too in the rate of expansion of the capital stock and trend labour force participation can be partly attributed to liberalisation of product and capital markets, along with greater flexibility in labour markets as a result of earlier efforts to free up the economy. However, the exceptionally strong and ultimately unsustainable rates of economic expansion of the late 1990s may have led to a degree of complacency about the need for further efforts to address the various aspects of the economy that still do not function particularly well. Addressing these shortcomings will help the nation to face more effectively the impact of demographics on future living standards.