Swedish government cuts 2027 GDP growth forecast to 2.5%

The Swedish government has lowered its 2027 GDP growth forecast to 2.5% due to the economic consequences of the Iran war and rising global energy prices.

​The Swedish government on Wednesday ‌lowered ​its GDP growth forecast for 2027 to 2.5% from 2.7% and warned ‌of economic consequences of the Iran war.

The right-wing government coalition, which is lagging the centre-left opposition in polls ahead of ‌a general election in September, reiterated a forecast given ‌in May for growth this year of 2.3%. "The war in the Middle East and the closure of the Strait of Hormuz have driven ⁠up ​global energy ⁠prices and worsened growth prospects in Sweden and the rest of the ⁠world," the government said in a statement.

"The recovery in the Swedish ​economy has slowed somewhat as a result of the ⁠war, but is expected to pick up again in the second half ⁠of ​2026." In the first quarter, the economy expanded 2.0% year-on-year, lagging expectations. In 2025, GDP growth was 1.5%.

Earlier ⁠on Wednesday, the central bank said it has become more likely ⁠it will ⁠raise rates this year in the face of increased inflationary pressures caused by the Iran ‌war.