Sweden's 2006 prospects are bright.

Among the four authoritative sources consulted recently by Market: Europe, there is general agreement that the Swedish economy grew significantly during 2005 and will add to this growth in 2006.

The four sources are: The International Monetary Fund (IMF) (April 19, 2006); Sweden's National Institute of Economic Research (NIER) (March 30, 2006); the Frankfurt based Commerzbank (April 22, 2006), and the Organization for Economic Cooperation and Development (OECD) (December 2005).

As expected, although there is a consensus specific forecasts differ. The IMF says Swedish GDP will grow 3.5 percent in 2006; the NIER is more optimistic for 2006 saying growth will be 3.6 percent; Commerzbank says 2006 GDP will be 3.0 percent, and the OECD forecasts Swedish 2006 GDP also at 3.0 percent.

Opinion differs, too, as to the main driving forces behind Swedish growth. Consideration is given to both exports and consumer spending, but without sharp contention.

One factor giving weight to consumer spending being the driving force is the Swedish government's commitment to boosting already vigorous employment programs. Sweden has long been known for its generous safety net initiatives across the social spectrum. The country's cash benefits for the unemployed are widely admired. Less well known are the broad range of skills development programs; special training packages for young people; grant support for unemployed persons who want to start their own businesses; incentives for employers who hire the unemployed, and sabbaticals for workers to encourage temporary replacement by an unemployed person. The person who takes a sabbatical, incidentally, qualifies for a range of skills training-or can opt for simple recreation.

No wonder, then, that Sweden's most recent consumer survey (March 2006) is upbeat. In a March 30, 2006 press release, the NIER said that consumer confidence was at its highest level since 2000-in spite of a drop in the confidence indicator to 15.5 in March 2006 from 17.0 in February 2006.

The NIER remarks, "however, we see no signs of a further increase in consumer optimism." In a separate release on the same day, the NIER said, "The Swedish economy is currently in a positive upward spiral where an improving labour market and rising household consumption are mutually reinforcing."

Other details from the consumer survey show that consumers are not quite as happy about their own personal finances as might be expected from the strength of the overall index. Opinions about the current state of the economy were likewise not as strong as expected. Looking forward 12 months, consumers were optimistic about the future, particularly-as might be imagined-in regard to employment.

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