2007 OECD Economic Surveys: Sweden 2007

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In this 2007 edition of OECD's periodic survey of Sweden's economy, OECD finds strong macroeconomic performance and  impressive productivity growth coupled with persistently low inflation.  The expansion is set to continue.   Among the challenges addressed are making employment inclusive for both immigrants and natives, and better allocation in the housing market.

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Key challenges for the Swedish economy

Sweden enjoys excellent macroeconomic performance with high rates of growth and stable inflation expectations. However, tensions are visible at the margin. Joblessness is widespread among immigrants and youngsters, and disability and sickness rates are comparatively high. Combating exclusion both in the labour and housing markets is a key challenge for policymakers. Early steps in regulatory reform, taken in the 1990s are paying off in terms of productivity and GDP, but renewed regulatory reform is needed inter alia to address the low rate of business formation. Progress on this reform agenda – employment in particular – is vital also for the long-run fiscal outlook which is shaped by population ageing. This chapter identifies such key challenges after first assessing recent macroeconomic developments including the housing and construction boom.

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