Sweden is the largest country in Scandinavia. It borders to Norway in the west and Finland in the northeast. In terms of area, Sweden is the 55th largest country in the world and third largest in Europe. In terms of population, Sweden is a rather small country with around 9.7 million inhabitants.
Sweden is a parliamentary democracy under a constitutional monarchy. The current monarch of Sweden is H.M. King Carl XVI Gustaf. The nation’s legislative body, the Riksdag , consists of one chamber with 349 members elected in the general elections held every four years. Regeringen, the Swedish Government, holds executive power and draws up proposals for new laws or law amendments.
In the 2010 general election the Moderate Party, allied with the Centre party, Liberal People’s party, and the Christian Democrats, with a common political platform, won enough votes to form a minority government. After the elections in 2014 there was a shift of power, and the Social Democratic Party formed a minority government together with the Swedish Green Party. However, this government failed to pass its budget through parliament and subsequently chose to announce that an extra election would be held in March 2015. The extra election was later cancelled and Prime Minister Stefan Löfven could continue to lead his minority government.
The official economic policy of the Government focuses on stable central government finances and the Swedish Central Bank, the Riksbank, endeavours to maintain a low inflation rate and high price stability.
Sweden is an export oriented market economy. Exports of goods and services amount to almost half of the GDP. Traditionally, the Swedish business sector and industry have been commodity-based. Although paper, iron and steel are still important products, Sweden’s main competitive factor today is knowledge and the flexible use of existing tangible and intangible resources.
Public sector and taxes
Sweden has a large public sector with ambitious healthcare, educational and childcare systems. In international terms, high income tax even at very low levels of income is a distinguishing feature of the Swedish tax system. This is due to very low basic allowance. Also, the highest marginal tax in Sweden, that is the percentage of tax paid on the last Krona of the tax base, is about 57 per cent and is applied at an, internationally speaking, low income level.
In international terms, high income tax even at very low levels of income is a distinguishing feature of the Swedish tax system
In relative terms, Sweden’s business sector is smaller than the averages for the EU and the OECD member states, which is to be considered in the light of the fact that the public sector accounts for a larger share of GDP than in comparable, industrialized countries.
The Swedish economy has undergone fundamental changes over the past fifteen to twenty years. Some of the most important changes concern new organizational structures in the business sector, larger foreign ownership and decreased production of goods in Sweden. In particular, the production of less complex products has been moved to low-wage countries. The increase of foreign ownership of Swedish businesses further increases Sweden’s economic dependency on other countries. Another important change is the new basic level of IT-technology permeating the whole of society, which strengthens the role of knowledge capital in the competitiveness of Swedish businesses.
- Capital: Stockholm
- Area: 450 000 km2 = 174 000 sq.mi.
- Language: Swedish
- Prime Minister: Mr. Stefan Löfven (Social Democratic Party)
- Population: Aprox. 9.7 million
- Member of the EU since 1995
- Member of a number of international organizations such as WTO and OECD.
- Most important export goods: Electrical and telecom equipment, machinery, passenger cars, paper, pharmaceuticals, iron and steel.
- Most important import goods: Electrical and telecom equipment, machinery, foodstuffs, crude oil, textile products, footwear, passenger cars.
- Most important export and import markets: Europe, North America and Asia.