Population 10.3 million
GDP 51,404 US$
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  2018 2019 2020 (e) 2021 (f)
GDP growth (%) 2.0 2.0 -2.8 3.9
Inflation (yearly average, %) 2.0 1.8 0.5 1.5
Budget balance (% GDP) 0.8 0.6 -3.1 -3.2
Current account balance (% GDP) 2.6 5.5 5.7 5.4
Public debt (% GDP) 38.9 35.1 39.7 40.6

(e): Estimate (f): Forecast


Very favourable business climate
Very diversified economy, specialized in high-tech products and the green economy
Sound public finances
Increasingly dynamic demographics


Highly dependent from global demand
Tensions on the real estate market
Substantial household debt (200% of personal disposable income 2020)
Highly concentrated banking sector

The alternative path to manoeuvre through a pandemic

A moderate economic recovery is expected in 2021, after the Swedish economy went into a mild recession in 2020, due to the global COVID-19 pandemic. After the virus hit Sweden in spring 2020, the government reacted unconventionally with the softest restrictions in Europe, which were mainly based on voluntary social distancing. Although the domestic economy remained open, private consumption and investments in Sweden decreased, as well as demand from abroad, so Sweden went into a recession regardless. The main reason was that the Swedish people remained cautious in their behaviour, even when there were no official hard restrictions in place. In parallel with other European countries, the Swedish economy recovered fast in the third quarter of 2020, but was confronted with a second wave from November 2020 to January 2021, and a third wave in spring 2021, which turned out considerably stronger than the first wave. During that period, governmental restrictions only sharpened in certain aspects, like the cancellation of some cultural events or a gathering limitation to avoid crowds. This Swedish special way helped to avoid a recession. In contrast with most other European countries, the Swedish economy improved and its GDP increased by 0.8% (quarter-over-quarter) in Q1 after a stagnation in Q4 2020. Further economic recovery is expected, as, thanks to the progress of the vaccination campaign (around 44% of the population were completely vaccinated in early August 2021) and with almost all restrictions lifted in early summer 2021, people can resume a normal life. Private consumption should further pick up, as the financial situation of households will probably improve in 2021, with a stronger savings rate as background and robust housing prices. The new collective wage deal, negotiated between unions and employers in the manufacturing industry in October 2020, resulted in a wage increase of 5.4% by March 2023. Although less than the previous 3-year-deal with its rise of 2.2% per year, it still builds a foundation for moderate consumption growth. The growth in investment expenditure should remain limited in 2021, as long as the economic uncertainty remains, especially around the new Delta-mutation of COVID-19 and its high risk of infection. Exports have picked up, as the demand from the Nordic neighbours, as well as Germany, the UK and the U.S. has revived.

The government supported the recovery and extended the furlough scheme and the state credit guarantee program until the end of June 2021 and the support scheme for retail traders until the end of April 2021. In total, the support measures should reach around SEK 105 billion (2.1% of GDP) in 2021. Additionally, the Riksbank initiated in 2020 a corporate loan programme (SEK 500 billion, 10% of GDP) and its asset purchase programme was extended from SEK 130 billion to SEK 700 billion until the end of 2021. In 2021, the key interest rate should remain at 0%. Due to the public support measures, the Swedish financial sector did relatively well in 2020 with a stable lending to households and companies. Nevertheless, a rise in corporate debt and bankruptcies are a main risk to the banking sector, which will focus on rebuilding its capital buffer.

External surplus remains high

The country’s current account surplus will remain high in 2021. The high returns on investments abroad of last year seem to continue in 2021. Together with strong exports, they support the current account surplus. The general government budget balance will remain negative in 2021 due to the extension of several economic support measures and the costs of the vaccination campaign. However, the deficit should remain limited, keeping the public debt at a sustainable level.


Prime Minister with fragile support in the parliament

Prime Minister Stefan Löfven from the Social Democratic Party (100 seats out of 349 seats in the parliament) is leading a minority government with the Green party (16 seats), supported by the social-liberal Centre Party (31 seats) and the Left Party (27 seats). Until early July 2021, the Liberals (19 seats) officially supported the government. However, when Löfven wanted to ease the rent controls for new-build-apartments in June 2021, a plan that was within the coalition-agreement, the Left party retracted its support. As a result, Löfven lost a vote of no confidence in the parliament, the first successful one in the Swedish history, and resigned, but stayed in the office as a caretaker. After a week, none of the other party leaders found enough support in the parliament to form a coalition. While the Left Party revived its support for Löfven, the Liberals quit. When parliament voted again on a government formed by Stefan Löfven, there were ultimately not enough votes against him (173 of the 175 needed), so that Löfven could regain his position until the next official general election in 2022. Nevertheless, important political decisions are not expected in-between due to the low parliamentary support for Löfven.


Last updated: August 2021


Bills of exchange and promissory notes are neither widely used nor recommended as they must meet a number of formal requirements in order to be considered as legally valid.

Just as the rules for issuing cheques have become more flexible, the sanctions for issuers of uncovered cheques have been relaxed over the years. The use of cheques has subsequently become almost non-existent.


Conversely, use of the SWIFT electronic network by Swedish banks provides a secure, efficient, and cost-effective domestic and international fund-transfer service. Payments are dependent on the buyer’s good faith. Sellers are advised to ensure that their bank account details are correct if they wish to receive timely payment.

Direct debits represent about 10% of non-cash payments in Sweden and are quickly growing in popularity. There are two types of direct debit in Sweden: Autogiro Foretag (AGF) for B2B transactions and Autogiro Privat (AGP) for B2C payments. They can both be used for single or recurring payments.




Amicable settlement aims to recover the debt without transferring the case into a trial procedure. The debtor is informed (either orally or via writing, with written correspondence being preferred) about the debt, the payment deadline, and the consequences of not paying the debt. If debtor agrees to pay the debt, both parties may settle on instalment payments through an official document that sets out the contractual terms of the agreement.


When there is no specific interest clause in the contract, the rate of interest applicable since 2002 is the six-monthly benchmark rate (referensräntan) of the Central Bank of Sweden (Sveriges Riksbank), plus eight percentage points.


Under the Swedish Interest Act (räntelag, 1975, last amended in 2013), interest on damages is awarded from the 30th day following the day on which the creditor addressed a written claim for damages to the defendant, if the plaintiff so requests. In any event, interest may be awarded from the date of service of the summons application.


Fast-track proceedings

Where claims meet some basic requirements (e.g. payment is overdue, mediation was attempted), creditors can obtain an injunction to pay (Betalningsföreläggande) via summary proceedings through the Enforcement Service. The application has to be made in writing and clearly express the grounds of the claim. No further proof needs to be submitted.

This Enforcement Authority (Kronofog–demyndigheten) orders the debtor to respond within a period of ten days to two weeks. If the debtor fails to reply in time or acknowledge the debt, a verdict will be rendered on the merits of the original application.


While formal, this system offers a relatively straightforward and quick remedy in respect of undisputed claims, which has greatly freed up the courts. Creditors are not required to hire a lawyer but, in some circumstances, would be well advised to do so. On average, the process takes two months from application to decision. The decision is immediately enforceable.


Court proceedings

If the debtor contests the debt, the creditor has the decision of either turning to the District Court (the first instance, Tingsrätten) or to terminate the process.

Proceedings involve a preliminary hearing in which the judge attempts to help the parties reach a settlement after examining their case documents, evidence and arguments. It is up to the parties themselves to decide what evidence they wish to submit.


If the dispute remains unresolved, the proceedings continue with written submissions and oral arguments until the main hearing, where the emphasis is on counsels’ pleadings (defence and prosecution) and examination of witnesses’ testimonies.


In accordance with the principle of immediateness, the court bases its decision exclusively on the evidence presented at the trial. Barring exceptional circumstances, the judgement is customarily issued within two weeks thereafter.


As a general rule, the Code of Civil Procedure requires the losing party to bear all legal costs considered reasonable, as well as the attorney fees incurred by the winning party beyond a given threshold claim amount (about SEK 22,250, approximately €2,162).


It takes up to twelve months (in exceptional cases more) to obtain a writ of execution in first instance, bearing in mind that there is a widespread tendency in Sweden to appeal against judgements.



As soon as a domestic judgment becomes final, it is enforceable. If the debtor does not comply, the creditor can request the court’s enforcement authority to seize and sell the debtor’s assets.

For awards rendered in an EU member-state, special enforcement conditions are provided. When the claim is undisputed, the creditor may apply to the European Enforcement Order, or when the claim does not exceed €2,000, the creditor may start a European Small Claim Procedure. For awards issued in non-EU countries, the Svea Hovrät Court of Appeal must recognize an award in order to enforce it, provided that a recognition and enforcement agreement has been signed between the non-EU country and Sweden.



Out-of court proceedings

Swedish law does not formally regulate out-of court arrangements. Nevertheless, creditors and debtors can enter into voluntary negotiations in order to negotiate the debt and reach an agreement.



The aim of restructuring is to find a financial solution for an insolvent company that is deemed to have sustainable long-term business prospects. It can apply for a restructuring with the local court. If approved, the court will appoint a rekonstruktör to manage the restructuring. The latter will investigate the financial situation of the company, before establishing and implementing a restructuring plan under which up to 75% of the debt may be written off.



Bankruptcy proceedings are initiated as a consequence of a company becoming permanently insolvent. They aim to wind down an insolvent company by selling its assets and distributing any income to creditors. Either the debtor or the creditor can file a petition before the local court. After the court has declared a company bankrupt, it appoints an administrator that independently takes control over the company’s assets with the main task of realising such assets and repaying the debts of the bankruptcy estate in accordance with the creditors’ statutory ranking.

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