This a very strong economy, where relatively high unemployment is the weak point versus a strong current account, balanced budgets, and a level of competitiveness nearly unmatched anywhere in the world.
Sweden is a textbook example of how an economist would want a country to function. Its' present issues are not its economic challenges but rather the issue of retooling the Swedish model to a world dealing with immigration.
The Swedish statistics agency says that the Swedish population has increased by one million people over the past 13 years, and is set to grow by another million in the next 11 years.
Eighty per cent of this increase will come from immigration.
What really concerns me is the total lack of self-reflection by the established parties. I wrote about this prior to Brexit and prior to Donald Trump's 2016 victory, and the same thing is now happening in Sweden.
The Social Democrats have been in near-continuous power since the Second World War, and often with more than a 40% share of votes. Now their support stands at just over 20% and their agenda is entirely without vision. Their counter to immigration fears? One week of additional holiday and more tax on the rich!
Come on, Sweden.
Structurally, the world is changing faster than ever before. The solution to Sweden's problems – and let’s admit that they are relatively minor problems – is not to turn the clock back to the 1960s and '70s, when Sweden (unlike many countries) was far worse off than it is today. Instead, Sweden needs to face the situation at hand in its traditional fashion: with consensus, with respect, and in a solution-oriented manner. A look at the market impact
There is some nervousness about Swedish assets after the election. Sweden's Erik Penser Bank, for instance, maintains a very defensive position
in which it has a particular aversion to small- and mid-cap stocks due to a history of this segment underperforming in the wake of elections.