COMMISSION STAFF WORKING DOCUMENT 2023 Country Report - Sweden Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of Sweden and delivering a Council opinion on the 2023 Convergence Programme of Sweden
Date: 2023-05-24
Institutions: European Commission, Secretariat-General
Subjects: Sweden, economic policy, economic recovery, economic reform, energy policy, fiscal policy, green economy, investment policy, stability pact, stability programme

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 24.5.2023  SWD(2023) 627 final  COMMISSION STAFF WORKING DOCUMENT 2023 Country Report - Sweden Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of Sweden and delivering a Council opinion on the 2023 Convergence Programme of Sweden {COM(2023) 627 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

The Swedish economy: trying to 
find a new balance 

S 

weden’s  economy  overall  has 
solid  fundamentals  but  is  facing 
strong  headwinds.  In  2022,  the 
economy grew by 2.6% after real GDP growth 
of  5.4%  in  2021.  However,  high  inflation  and 
the  subsequent  monetary 
tightening  has 
exposed  some  structural  vulnerabilities  in  the 
Swedish  economy  linked  to  high  private  debt 
and  the  housing  market.  Household  spending 
fell  as  homeowners  high  in  debt  had  to  pay 
higher  interest  on  their  debt.  The  fallout  in 
housing demand, rising construction costs and 
increased  capital  costs  greatly 
reduced 
construction  activity,  suppressing  growth  (see 
Graph 1.1).  

Graph 1.1: Real investment development in 
construction and real estate activities and 
real GDP growth 

The vulnerabilities are assessed in the In-
Depth Review for Sweden (1). The country is 
facing  vulnerabilities  related  to  its  real  estate 
market  and  high  private  debt.  Sweden  has 
persistently 
recorded  house  price  growth 
above income growth (see Annex 22).  

Following  Russia’s  war  of  aggression 
against  Ukraine,  energy  prices  and 
inflation  jumped  to  high  levels.  Annual 
inflation increased to 8.1% in 2022. Electricity 
prices  also  rose  sharply,  even  at  the  end  of 
2022 when they started to fall across the EU, 
pushing  consumer  price  inflation  (Harmonised 
Index  of  Consumer  Prices  (HICP))  to  10.8% 
year-on-year 
in  December.  Electricity  and 
other  energy  prices  are  projected  to  have 
peaked  in  2022,  and  then  to  fall  to  lower 
levels  in  2023.  This  along  with  the  inflation 
expectations  still  anchored  at  the  Riksbank’s 
target  of  2%  for  CPIF (2)  inflation  should 
support to bring inflation back to the target in 
2024. 

Fiscal  support  has  been  limited  so  far. 
The  government  has  restrained  its  use  of 
fiscal  policy,  citing  risks  that  could  lead  to 
inflation  remaining  high  It  only  compensates 
households  retrospectively  for  higher  energy 
prices (see text box below). As the size  of the 
compensation  depends  on  consumption  the 
effect 
likely  regressive  and  not  well 
targeted.  If  required,  fiscal  policy  could  go 
further, as the government deficit is expected 
to stay close to balance and government debt 
to  decline  to  a  level  close  to  30%  of  GDP  in 
2023. 

is 

Source: Statistics Sweden and European Commission 

Capital  investment  other  than  that  related  to 
real  estate  has  kept  up  relatively  well,  while 
foreign  demand  also  contributed  positively  to 
Swedish exports. 

(1)  European Commission (2023), In-Depth Review for 
Sweden, Commission staff working document 
(COM(2023) 644 final). 

(2)  In the Consumer Price Index with Fixed interest payment 
(CPIF) inflation, the headline CPI inflation is corrected 
for the impact of price changes in interest payments. 

2 

-10-8-6-4-202468Q-o-Q, %GDP - Total economyInvestment - Construction and real estate activitiesInvestment - Total economy excluding construction and realestate activities 
 
   
                                                 
Box 1: 

Box on energy policy response in Sweden 

Sweden has adopted several support measures to cushion the impact of energy price inflation on 
households and businesses.  The Commission 2023 Spring Forecast projects the country’s gross 
budgetary  costs  to  amount  to  0.8%  of  GDP  in  2023 (4).  Not  all  measures  preserve  the  price 
signal, and most are not targeted. Parts of the  costs are offset by revenues from the Swedish 
transmission system operator, Svenska Kraftnät. 

Sweden  has  introduced  a  compensation  scheme  to  help  cover  electricity  cost  worth  SEK  17 
billion  (approximately  EUR  1.55  billion),  benefiting  households  in  the  southern  and  central 
Sweden reimbursing, ex post, parts of the electricity costs incurred between October 2021 and 
September 2022. A similar scheme worth SEK 10 billion (approximately EUR 0.9 billion) applying 
to costs incurred by all households during November and December 2022 will be rolled out later 
in the year. In addition, Sweden has announced a SEK 29 billion (approximately EUR 2.6 billion) 
scheme of liquidity support to businesses and organisations facing significantly increased costs 
of electricity, which will be in place before the summer 2023. This comes on top of an existing, 
more targeted SEK 2.4 billion (approximately EUR 217 million) support scheme that is open only 
to businesses that are especially electricity intensive, compensating  ex post for increased costs 
incurred between October and December 2022.   

Sweden has also lowered the energy tax on diesel and petrol during 2023-2025, at  an annual 
cost of some SEK 6,8 billion (approximately EUR 607 million). 

As  part  of  its  application  of  Council  Regulation  (EU)  2022/1854 (5),  Sweden  will  be  applying  a 
national  measure (6).  The  measure  will  apply  as  of  1 March 2023  until  30 June 2023  to 
electricity  producers’ revenues  above  SEK  1957/MWh  (EUR  180/MWh (7)),  at  a  rate  of  90%. 
Sweden estimates a net fiscal effect of SEK 0.360  billion (approximately EUR  0.033  billion). In 
addition, to implement the solidarity contribution, Sweden has introduced a national measure (8) 
for the fiscal year 2023, setting a rate of 33% (9).  

On security of  energy supply, Sweden  has introduced energy saving  measures and  updated its 
electricity load shedding (10) rules to ensure risk preparedness. Manual load shedding is planned 
and organised by prioritising electricity consumers.  

Economic  growth  is  only  expected  to 
recover  towards  the  end  of  2023.  The 
Swedish  economy  is  projected  to  go  into 
recession in the first half of 2023 on the back 
of  declining  real  disposable  income,  higher 
mortgage 
lower 
and 
investments, 
construction,  due  to  uncertainty.  With  the 
housing  market  expected  to  stabilise  later  in 
the  year  and  a  gradual  recovery  of  lost 
purchasing power (3), the economy is expected 
to  slowly  return  to  growth  helped  by  foreign 
demand. Still, real GDP is forecasted to fall by 

interest  payments,  and 
estate 

beyond 

real 

(3)  On 31 March 2023, the social partners representing 

employers and workers in industry reached a two-year 
agreement on a wage increase of 4.1% in 2023 and 
3.3% in 2024. The industry agreement increase level – 
‘the mark’ – is expected to be followed across a large 
part of the labour market. 

3 

0.5%  in  2023,  before  picking  up  to  1.1%  in 
2024.   

(4)  For 2022, gross budgetary costs of measures amounted 
to 0.5.% of GDP. Some of the measures outlined in this 
box were already in place in 2022. 

(5)  EUR-Lex - 32022R1854 - EN - EUR-Lex (europa.eu) 

(6)  https://www.riksdagen.se/sv/dokument-

lagar/dokument/svensk-forfattningssamling/lag-
202375-om-skatt-pa-overintakter-fran-el_sfs-2023-
75 

(7)  Sweden applies the EUR/SEK exchange rate of 3 
October 2022 for the purpose of this measure. 

(8)  https://rkrattsbaser.gov.se/sfst?bet=2022:1843 

(9)  Member States can keep national measures that are 
equivalent to the solidarity contribution regulated in 
Council Regulation (EU) 2022/1854 provided they are 
compatible with the objectives of the regulation and 
generate higher or comparable proceeds. This measure 
must also to cover the extraordinary and unexpected 

 
                                                 
                                                 
 
is 

in 

leading 

innovation, 
Sweden 
supporting  productivity,  which  needs  to 
be  maintained to  ensure  competitiveness 
in  the  long  term.  Labour  productivity  is 
comparatively  high,  standing  at  120%  of  the 
EU aggregate in 2021. The country has a high 
level  of  R&D  spending  in  the  business  sector, 
which  at  6.4%  of  GDP  was  twice  the  EU 
In  addition,  Swedish  firms  were 
average. 
leading in developing new products, processes, 
and  services  in  2021 (11),  benefiting  from  a 
conducive business environment for firms and 
entrepreneurs  (see  Annex  12).  To  keep  this 
position  and  to  ensure  a  successful  twin 
transition  of  the  economy,  a  constant  supply 
of  skilled  labour  is  required,  which  in  some 
sectors is falling short (Annex 11). 

The  Swedish  labour  market  continues  to 
be  strong  but  could  be  more  inclusive. 
Government  support  helped  to  keep  most 
people  in  their  jobs  and  the  employment  lost 
during the pandemic was recovered in 2022. In 
Q3-2022,  employment  was  even  above  the 
2030  national  target.  Despite  the  economic 
headwinds, unemployment is expected to only 
slightly increase from 7.2% in 2022 to 7.8% in 
2024.  However,  finding  employment  is  much 
easier  for  highly  skilled  people,  while  people 
who  are  low-skilled  and  /or  people  with  a 
migrant background have difficulties getting a 
job. 

Onwards to more prosperity and 
better chances for all 

it  could  do  more 

Sweden  is  on  track  to  achieving  the 
Sustainable  Development  Goals  (SDGs), 
but 
reduce 
inequalities in education. Sweden performs 
well on indicators for the SDGs on productivity 
and 
to 
environmental  sustainability  and  to  fairness 

on  most 

indicators 

related 

to 

profits of businesses active in the extraction of crude 
petroleum, natural gas, coal, and refinery sectors. 

(10)  ‘load-shedding’ is a corrective measure to maintain the 
electricity system’s balance when available capacity 
resources are not adequate to meet total demand. 

(11)  EIB Investment Survey 2022 

4 

(see  Annex  1).  However,  the  circular  material 
use  rate  (SDG  12)  slightly  decreased,  moving 
away  from  the  EU  average.  Even  if  there  has 
been  a  slight 
improvement  on  SDG  10 
(Reduced  inequalities),  the  employment  gap 
between  people  born  in  Sweden  (with  both  of 
their parents also born in Sweden) and people 
born 
in  a  foreign  country  remains  high 
compared  to  the  EU  average.  The  share  of 
‘early  leavers  from  education  and  training’ 
(SDG 4) increased from 7.4% in 2016 to 8.4% 
in 2021. 

towards 

improved 

Progress 
social 
fairness could build on existing strengths. 
The  Social  Scoreboard  that  supports  the 
European  Pillar  of  Social  Rights  indicates  a 
well-performing labour market and good social 
outcomes  overall  in  Sweden  (see  Annex  14). 
Educational  outcomes  are  good  overall,  but 
inequalities 
inequalities 
negatively  affect  pupils  from  disadvantaged 
backgrounds  and 
labour 
participation staying different between people 
from  disadvantaged  background  and  other 
groups.  

contribute 

persist. 

These 

to 

The rental market functions poorly and is 
hardly  an  alternative  to  hard-to-afford 
home ownership.  The  very  low  vacancy  rate 
in  the  rental  market  and  the  long  waiting 
queues  are  symptoms  of  a  poorly  functioning 
housing  market.  As  house  prices  have 
increased  faster  than  income  supported  to 
some  extent  by  low  recurrent  property  taxes 
and  mortgage  interest  rate  deductibility,  low-
income  households  face  difficulties  finding  a 
home  as  buying 
is  not  an  alternative. 
Opportunities  in  the  housing  market  therefore 
seem  to  be  skewed  towards  those  already 
owning  a  property  or  who  have  financial 
support or inherited wealth.  

Equality  of  opportunities  in  the  housing 
market and in education are linked. Access 
to  affordable  housing  in  all  parts  of  Sweden 
would  also  improve  social  mobility  because 
the  selection  of  schools  is  largely  correlated 
with  the  place  of  residence,  especially  for 
pupils  attending  public  schools (12).  In  the 

(12)  National Agency for Education – NAE (2023), Välja 
förskoleklass och grundskola eller grundsärskola, 
https://www.skolverket.se/regler-och-ansvar/ansvar-i-

 
                                                                        
                                                 
current  situation,  this  often  results  in  the 
clustering of pupils with a similar background. 
Moreover,  in  disadvantaged  areas  children 
from  better  educated  families  are more likely 
to  attend  independent  schools  and  get  better 
chances  for  further  education (13).  Socio-
economic  and  migrant  backgrounds  together 
with 
teachers  affect 
educational  outcomes  and  chances  in  the 
labour  market  (see  ‘Further  priorities  ahead’ 
and Annex 15). 

shortage  of 

the 

in 

energy 

renewable 

Future  generations  would  benefit  from 
strengthened energy and climate policies. 
The  green  competitiveness  of  the  Swedish 
economy  has  benefitted  strongly  from  earlier 
like 
investments 
hydropower.  As  regards  future  competitive 
sustainable  production,  the  current  renewable 
resources  are  not  sufficient  and  those  that 
low-carbon 
drive  Sweden’s  advantages 
production  are  not  available  throughout  the 
limited  grid  capacity. 
country  because  of 
increase  renewable 
Sweden  will  need  to 
energy  sources  while  increasing  its  energy 
efficiency.  The  electrification  of  Swedish 
production  and 
the 
backbone  of  the  green  transition,  requires 
sizeable investments in the electricity grid. 

transport,  which 

in 

is 

skolfragor/valja-forskoleklass-och-grundskola-eller-
grundsarskola#h-Mottagandetillenfristaendeskola. 

(13)  Edmark, K., & Persson L., (2022), Resultat och 

betygsättning i gymnasiefriskolor. 

5 

 
 
                                                                        
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 

to 

Sweden’s  recovery  and  resilience  plan 
(RRP) aims to address the key challenges 
related 
the  green  and  digital 
transition, the housing market, the labour 
market,  education,  healthcare  and  anti-
money laundering.  It consists of 15 reforms 
and 12 investments that are supported by EUR 
3.3 billion in grants, representing 0.5% of GDP 
(see Annex 3 for more details).   

While  Sweden’s  recovery  and  resilience 
plan  was  only  adopted  in  2022,  its 
implementation  is  now  underway.  The 
operational agreement was officially signed in 
May 2023. Implementation is on track despite 
a  slow  start  and,  at  this  stage,  risks  of  non-
absorption  appear  limited  given  the  relatively 
small  financial  allocation.  The  preparations  of 
a  plan  revision,  including  the  addition  of  a 
REPowerEU  chapter  and  limited  changes  due 
to  the  slight  decrease  of  non-repayable 
support,  are  ongoing.  Sweden  is  expected  to 
submit  its  first  payment  request  combining 
two  instalments  in  the  second  half  of  2023. 
request  would  cover  22 
This  combined 
milestones  and  targets  that  track  progress 
across  all  components  of  the  recovery  and 
to  a 
leading 
resilience  plan,  potentially 
disbursement of up to EUR 1.1 billion.  

The  following,  more  detailed 
review  of 
measures being implemented under the RRP in 
no way implies formal Commission approval or 
rejection of any payment requests. 

Sweden  has  started  implementing  key 
elements of its plan. These include reforms 
such  as  regulating  the  professional  title  of 
nursing  assistants  (i.e.,  regulating  the  way  in 
which nursing assistants are certified) as well 
as  key  investments  in  local  and  regional 
climate investments solutions. Some measures 
like  the  pension  reform  or  regional  adult 
vocational education are partially completed or 
are  expected  to  be  completed  in  2023-2025. 
is  expected  to  cover 
The  first  payment 

6 

investment  schemes  that  help  achieve  the 
green and digital transitions, such as increased 
energy efficiency in multi-dwelling buildings or 
more widespread broadband access for homes 
in  rural  areas.  Moreover,  the  first  payment  is 
to finance measures aiming to improve social 
cohesion  and  healthcare  provision,  such  as 
vocational 
combined  with 
Swedish  as  a  second  language  or  training 
courses  to  take  care  of  older  people.  The 
disbursement would also finance reforms that 
have  a  positive  impact  across  the  whole 
country,  such  as  a 
that  helps 
accelerate  processes  involved  in  acquiring 
building permits. 

programmes 

reform 

Promoting the green transition 

The  Swedish  plan  is  strongly  focused  on 
transition,  with  specific 
the  green 
reforms  and 
investments  primarily 
targeting  carbon-intensive  sectors.  The 
plan includes a package of tax reforms aiming 
to  influence  the  behaviour  of  businesses  and 
individuals,  so  they  become  more  supportive 
of  the  green  transition.  A  law  requiring  fuel 
suppliers to blend in biofuels in gasoline, diesel 
and jet fuel entered into force in 2021, which 
is expected to help Sweden achieve its climate 
objective  to  become  carbon  neutral  by  2045. 
Sweden’s 
are 
supported  by  the  entry  into  force  of  laws 
abolishing the reduction of energy tax on fuel 
for 
and  adjusted 
company  cars. The  plan  focuses  mainly  on 
expanding  renewable  energy  capacity,  on  the 
decarbonising  industry  (Industry  Leap)  and 
efficiency 
transport 
improvement.  The  Climate  Leap  investment 
scheme,  which  finances  local  and  regional 
activities  to  reduce  emissions  of  carbon 
dioxide  and  other greenhouse  gases  affecting 
the  climate,  is  ongoing  and  should  accelerate 
the green transformation of the economy.  

taxable  benefit 

decarbonisation 

efforts 

energy 

rates 

and 

on 

 
 
Accelerating the digital 
transformation 

reported 

Measures  in  the  RRP  will  help  accelerate 
the digital transition, with lasting impact 
on the Swedish economy. More than 66 000 
to  have  already 
buildings  are 
received support for broadband expansion and 
more buildings should be connected every year 
up  until  2025.  High-speed  and 
reliable 
less 
in 
broadband  connectivity,  especially 
populated  areas,  supports  territorial  cohesion. 
The  plan  will  accelerate  the  deployment  of  e-
government solutions by allocating substantial 
digital 
joint 
funds 
infrastructure 
administration, 
improving interoperability and data exchange.  

developing 

public 

for 

for 

a 

Improving the functioning of the 
housing market 

The  RRP  partially  addresses  existing 
in  the 
macroeconomic  vulnerabilities 
housing market and private debt. Although 
the  plan  does  include  reforms  that  affect  the 
demand side, such as the 2020 change of law 
that  lowered  taxes  on  deferred  capital  gains, 
these  reforms  are  expected  to  have  limited 
impact  on  the  housing  market  and  on  private 
debt  levels.  The  plan  focuses  more  on  the 
supply  side.  Rental  and  student  housing  have 
been benefitting from investment subsidies to 
construct  new  dwellings.  Legal  changes 
entered into force in 2021 to shorten the time 
in  areas  where 
it  takes  to  plan  zoning 
construction is allowed. More opportunities are 
given  to  stakeholders  like  property  owners, 
developers  or  builders  to  create  and  partly 
zoning  plans.  Specific 
develop  detailed 
amendments to the Planning and Building Act 
in  2022  have  led  to  better  prerequisites  in 
housing  construction,  which  should  accelerate 
the  building  permitting  procedures.  Additional 
reforms  are  planned,  an  important  one  being 
the  simplified  and  more  efficient  regulatory 
framework for building permits in 2023.  

7 

Strengthening education and skills 

The  RRP  includes  measures  to  partially 
tackle education and skills gaps. Different 
legislative amendments took effect in 2022 to 
modernise  employment  protection  and  to 
provide  improved  possibilities  for  workers  to 
develop new skills. A law entered into force in 
2021  to  establish  economic  incentives  for 
municipalities  to  offer  training  courses  that 
combine  vocational  training  in  healthcare  and 
social  care  with  Swedish  language  training. 
More  than  68 000  new  study  places  are 
expected  to  have  been  created  in  regional 
adult vocational  education in 2020-2022. The 
scheme  is  continuing  in  2023.  Activities  to 
scale  up  the  number  of  study  places  at 
universities  and  other  higher  education 
institutions are on-going.  

Increasing the resilience of the 
healthcare sector 

The  RRP  includes  measures  to  increase 
the  accessibility,  capacity  and  resilience 
of  the  healthcare  and  long-term  care 
system. Thanks to the ‘Elderly Care Initiative’, 
10 775 employees in municipal care for older 
people  are  expected  to  have  improved  their 
skills.  The  RRF 
to  compensate 
intends 
municipalities  for  enabling  staff  members  to 
improve  their  skills  and  to  do  training  during 
working hours. The investment started in 2020 
and  will  continue  throughout  2023.  The 
strengthening  of  healthcare  resilience  is  part 
of  a  broad  plan  to  upgrade  the  Swedish 
healthcare  system  by  providing  training  to 
care  providers  for  older  people,  more  study 
places  in  vocational  education,  and  training 
focused on healthcare and social care, as well 
as  introducing  a  protected  title  for  assistant 
nurses to make this profession more attractive 
to  job  seekers.  These  measures  are  expected 
to  address  structural  weaknesses  highlighted 
during  the  COVID-19  pandemic,  such  as 
shortages 
and 
geographical  imbalances  in  the  distribution  of 
healthcare. 

healthcare  workers 

of 

 
Combating money laundering   

The RRP is expected to reduce the risk of 
money laundering in the financial system. 
The plan includes a measure that entered into 
force in 2020 to create a database of holders 
of  accounts  and  safe  deposit  boxes  of 
financial  undertakings,  which  can  be  checked 
directly  by  the  responsible  authorities.  The 
information  that  financial  undertakings  are 
obliged to report in the system will improve its 
effectiveness 
combatting  money 
laundering and terrorist financing. 

for 

Box 2: 

Key deliverables under the RRP in 2023-2024  

  Financing of projects that will reduce greenhouse gas emissions by 230 000 tonnes CO2  

  At least 16 900 new study places created in vocational training and adult education 

  Entry into force of a law establishing a simplified and more effective regulatory framework 

for building permits 

  At least 17 500 buildings newly connected to broadband 

  Development of a new digital public administration service and upgrade of the current one   

  8 000 participants to start education under ‘The Elderly care Initiative’ 

  A simplified and efficient regulatory framework for building permits 

8 

 
 
 
 
FURTHER PRIORITIES AHEAD 

Beyond those already tackled by the RRP, 
Sweden  faces  further  challenges  not 
sufficiently covered by the plan. These are 
linked to the way the housing market functions 
and  high  private  debt,  the  green  transition  of 
labour  market 
the  economy  as  well  as 
integration  and  education  and  skills  gaps. 
Addressing  these  challenges  will  also  help 
Sweden  make  further  progress  in  achieving 
the  SDGs  where  there  is  currently  room  for 
further 
improvement,  namely  on  SDG  4 
(Quality  education),  SDG  7  (Affordable  and 
clean  energy),  and  SDG  8  (Decent  work  and 
economic growth). 

Moving to a more stable housing 
market  

Sweden continues to face macroeconomic 
vulnerabilities  related  to  real  estate  and 
high levels of private debt (14). The debt of 
non-financial  corporations  and  households 
remains  at  near  historical  highs  relative  to 
GDP;  household  debt 
is  particularly  high 
relative  to  disposable  income.  House  prices 
the  COVID-19 
following 
rose 
pandemic  from  already  high  levels  but  have 
started to correct as interest began to increase 
(see Annex 22).  

strongly 

Limited  policy  action  was  taken  to 
address  the  real  estate  and  private  debt 
vulnerabilities.  Over  the  years,  the  tax 
system  has  continued 
favour  home 
ownership  through 
low  recurrent  property 
taxation  and  promoted  debt-financed  housing 
tax 
acquisition 
interest 
deductibility 

the 
mortgage 

through 
of 

generous 

to 

payments. (15)  The  rental  market  saw  limited 
reform  and  average  rents  are  still  well  below 
market rents, resulting in long waiting lists and 
a very low vacancy rate compared to other EU 
Member  States.  These  policy  factors  behind 
the macroeconomic vulnerabilities still need to 
be addressed. Through expanding the analyses 
of  the  commercial  real  estate  companies’ 
financial 
are 
increasingly  aware  of  the  risks.  Beyond  an 
increase 
capital 
buffer (16)  to  the  neutral  level  in  June  2023 
and  a  2020  increase  in  capital  requirements 
applying  to  real  estate  by  the  financial 
supervisor, no significant policy action has yet 
been designed. 

counter-cyclical 

policymakers 

situation, 

the 

in 

in 

economic 

Recent 
developments 
strengthen  the  case  for  reforms  in  the 
housing  market.  Developments 
the 
Swedish  economy  are  currently  driven  to  a 
large  extent  by  events  in  the  housing  market 
with  rising mortgage  rates  eroding  disposable 
income  and  a  drop 
in  real  estate  and 
construction investment driving GDP down (see 
the  section  ’The  economic  and  employment 
snapshot’).  House  prices  fell  by  12.7%  in  the 
first  quarter  of  2023  in  real  terms  after 
reaching their  peak in  early  2022.  Changes in 
the  institutional  and  tax  framework  are  still 
needed.  Sweden  also  needs  to  address  the 
bottlenecks preventing the rental market from 
functioning  properly,  by  means  of  stimulating 
construction  and  liberalising  rents  for  the 
existing  stock.  The  phasing 
in  of  such 
measures  would  need  to  be  calibrated  to  the 
economic  situation  but  it  would  provide  the 
basis  for  a  more  stable  housing  market.  It 
would also be useful to create a database with 
data  on  assets  and  liabilities  at  the  level  of 

(14)  European Commission (2023), In-Depth Review for 
Sweden, Commission staff working document 
(COM(2023) 644 final). 

(16)  A variable capital requirement that aims to make credit 
growth less cyclical and the banking system more 
resilient 

(15)  See, for instance, European Commission, In-Depth 

Review for Sweden, 2022, Commission Staff Working 
Document SDW(2022) 639 final 

9 

 
 
                                                 
                                                 
individual households to better understand the 
spreading  of  risks  to  net  wealth  and  the 
impact of policies on the population. 

Removing constraints in energy 
grid capacity and administrative 
bottlenecks to accelerate the 
green transition  

consumption.  Although 

Sweden  continues  to  be  a  frontrunner  in 
terms  of  renewable  energy  production 
and 
the  new 
government  has  moved  away  from  a  100% 
‘renewable’  to  a  100%  ‘fossil-free’  energy 
target  by  2040,  Sweden  continues  to  be 
among  the  Member  States  with  the  highest 
proportion  of  energy  consumption  produced 
from  renewable  energy  sources.  In  2021, 
renewable  energy  accounted  for  48%  of 
Sweden’s  energy  mix.  Furthermore,  installed 
renewable energy capacity grew steadily, with 
the  capacity  of  photovoltaics  increasing  from 
1.1  GW  to  1.5  GW  and  the  capacity  of  wind 
generation  increasing  from  10  GW  to  12  GW 
(see  Annex  6).  However,  Sweden  risks  not 
meeting  its  2030  climate  target  of  reducing 
greenhouse  gas  emissions  by  40%  in  sectors 
that  do  not  fall  under  the  EU  Emissions 
Trading  Scheme  on  the  basis  of  current 
policies  alone.  Sweden 
is  also  risks  not 
meeting its 2030 target for the land use, land 
use change and forestry sector (see Annex 6).  

to 

and 

are 

grid 

power 

needed 

Further  investments  in  grid  and  network 
capacity 
further 
decarbonise  Sweden’s  energy  system. 
Insufficient 
capacity, 
particularly 
in  the  south  of  the  country, 
coupled  with  a  lack  of  transmission  capacity 
between the north and the south continued to 
have  negative  impacts  on  both  energy  prices 
for  industry  and  households,  and  economic 
activity  in  2022.  At  the  same  time,  Sweden’s 
electricity consumption is expected to increase 
to  at  least  300  TWh  by  2045,  which  is  more 
than double the current consumption level. As 
the  electrification  of  industry  and  transport 
continues  to  accelerate,  the  need  to  expand 
the  capacity  of  the  electricity  grid  increases 
(see Annex 7).  

recent 

procedures 
energy 

administrative 
renewable 

Streamlining  administrative  procedures 
could  further 
increase  the  share  of 
energy  produced  from  renewables  and 
the  deployment  of  net-zero  technologies. 
identified 
‘RES  Simplify’  study 
A 
Sweden  as  one  of  the  Member  States  with 
lengthy 
for 
deploying 
sources, 
especially  onshore  wind,  to  the  extent  that 
projects  might  no  longer  be  economically 
viable  by  the  time  the  administrative  process 
is  completed (17).  The  coalition  agreement  of 
the  ruling  government  agreed  to  investigate 
how to simplify and shorten the environmental 
permit  assessment  under  the  Environmental 
Code,  to  make  it  more  flexible,  effective  and 
predictable.  However,  without  concrete  policy 
action,  bottlenecks,  particularly  at  the  local 
level, in the authorisation of both onshore and 
offshore  renewable  energy  projects  are  likely 
(see  Annexes  7  and  12). 
to  persist 
speeding  up 
Opportunities 
administrative  procedures  by 
limiting  the 
number  of  authorities  involved  in  permitting 
procedures and running processes at different 
administrative  levels in  parallel  rather  than  in 
sequence.  

remain 

for 

Under  the  current  plans  to  move  away 
from  a  100%  renewable  to  a  100% 
fossil-free energy mix, Sweden will likely 
not  achieve  its  target  of  using  energy 
50%  more  efficiently 
in  2030  as 
compared  to  2005.  Although  Sweden’s 
primary  energy  consumption  decreased  from 
47.3  Mtoe  to  41.3  Mtoe  between  2018  and 
2020, it increased again to 43.8 Mtoe in 2021. 
If  the  overall  trajectory  between  2005  and 
2021  continues,  Sweden  will  miss  the  2030 
target,  regardless  of  energy  savings  in  final 
energy consumption (see Annex 6).   

Investments  in  manufacturing  capacities 
for  ‘clean  tech’  are  crucial  for  boosting 
industrial  competitiveness,  as  laid  out  in 
the  Green  Deal  industrial  plan.  According 
to  the  European  Innovation  Scoreboard  2022, 

(17)  European Commission, Technical support for RES policy 
development and implementation – Simplification of 
permission and administrative procedures for RES 
installations (RES Simplify), Commission Interim Report 
(2021).  

10 

 
                                                 
 
on 

climate 

overall,  Sweden  continues  to  be  the  best 
performer  in  the  EU.  Still,  it  has  a  mixed 
performance 
change-related 
indicators  with  a  below-average  share  of 
material  resources  coming  from  recycled 
waste  materials,  but  an  above-average  score 
on  environmental 
innovation.  However,  a 
steeply increasing trend has been observed in 
venture  capital  investments  in  climate  tech 
start-ups and scale-ups, with EUR 2.9 billion in 
2021  compared  to  EUR  0.78  billion  in  2020 
(39%  of  total  venture  capital  investments  in 
2021,  compared  to  23.7%  in  2020).  Such 
investments  are  crucial  for  bridging  the  gap 
between  R&I  and  market  uptake,  thereby 
helping  to  boost  Sweden’s  and  the  EU’s 
competitiveness.  

in 

labour  shortages 

In  Sweden,  in  the  context  of  the  green 
transition, 
in  key 
sectors  have  increased  in  recent  years, 
which  are  linked  to  a  lack  of  relevant 
skills, 
the 
creating  bottlenecks 
transition to a net-zero economy. In 2022, 
labour shortages were reported in Sweden for 
16  occupations  that  required  specific  skills  or 
knowledge  for  the  green  transition,  including 
environmental  and  occupational  healthcare 
and  hygiene  professionals,  plumbers  and  pipe 
fitters,  as  well  as  building  frame  and  related 
trades  workers (18).  The 
job  vacancy  rate 
increased  across  key  sectors,  such  as 
construction  (from  1.4%  in  2015  to  1.6%  in 
2021) and manufacturing (from 1.1% in 2015 
to  2.0%  in  2021),  with  only  manufacturing 
standing  above  the  EU  average  of  1.9%  in 
2021 (19).  In  2022,  labour  shortages  were 
reported as a factor constraining production in 
industry (for 17.6% of firms) and construction 

(18)  Data on shortages is based on European Labour 

Authority (2023), EURES Report on labour shortages and 
surpluses 2022. National authorities report through a 
questionnaire, based on administrative data and other 
sources as submitted by the EURES National 
Coordination Offices (definitions of shortages differ, 
thus data is not comparable across countries and 
covers a wide variety of sectors). Skills and knowledge 
requirements are based on the ESCO (European Skills 
Competences and Occupations) taxonomy on skills for 
the green transition (for occupations at ISCO 4-digit 
level of which there are 436 in total). Examples are 
identified based on their ESCO “greenness” score and 
relevant sectors. 

(for  41.3%  of  firms) (20).  Upskilling  and 
reskilling for the green transition, including for 
the  people  most  affected,  and  promoting 
inclusive  labour  markets  are  essential  policy 
levers  for  accelerating  the  transition  to  net-
zero and ensuring its fairness (see Annex 8). 

Achieving labour market 
integration, while tackling 
education and skills gaps to raise 
competitiveness   

Socio-economic and migrant backgrounds 
as well as the shortage of teachers have 
a visible impact on educational outcomes. 
Sweden is performing above the EU average in 
terms  of  quality  education  (see  Annex  1),  yet 
certain  challenges  remain.  The  share  of  early 
leavers  from  education  and  from training  has 
been increasing since 2019 and there are clear 
differences  between  native  and  non-EU  born 
students in Sweden (6.3% compared to 16.3% 
in  2021).  The  share  also  differs  significantly 
between cities and rural areas (see Annex 17). 
In  addition,  there  is  a  clear  shortage  of 
qualified teachers and interest in the teaching 
profession  is  declining  post-pandemic  (see 
Annex  15).  The  lack  of  equal  opportunities  in 
the  schooling  system  continues  to  negatively 
affect pupils with a migrant background.  

levels 

to  49.3%),  but 

The  educational  attainment  levels  are 
increasing 
in  Sweden,  but  challenges 
remain  for  certain  groups.  Post-secondary 
educational  attainment 
in  Sweden 
increased  between  2015  and  2021  (from 
46.5% 
there  are  clear 
differences  by  country  of  birth  and  degree  of 
urbanisation. While the attainment levels have 
been increasing for people born in Sweden and 
born  in  the  EU  but  working  in  Sweden,  the 
education  levels  for  people  born  outside  the 
EU have decreased in recent years (see Annex 
increased  the  gap 
15).  This  has  further 
between EU born and non-EU born people and 
reduced  the  chances  of  non-EU  born  workers 
finding  jobs.  There  is  also  a  significant  gap 
between educational attainment levels in cities 

(19)  Eurostat (JVS_A_RATE_R2). 

(20)  European Business and Consumer Survey. 

11 

 
                                                 
                                                 
and rural areas (62.2% compared to 30.7% in 
2021). 

Reducing  the  skills  gap  will  promote 
social  inclusion of  vulnerable  groups and 
contribute to the overall competitiveness 
of  the  economy.  Sweden’s  labour  market 
offers  more  opportunities  for  those  with  the 
right skills. Helping more people develop skills 
relevant  to  the  labour  market  could  increase 
their chances of finding a job and reduce their 
risk  of  falling  into  poverty  and  experiencing 
social  exclusion  (see  Annex  14).  Shortages  in 
skilled  labour  have  been  identified  in  the 
services  sector,  specifically  in  professional, 
scientific and technical activities, together with 
administrative  and  support  service  activities 
(4.8%  compared 
to  the  overall  national 
average  of  3.3%).  They  also  pose  a  major 
challenge for the development of the country’s 
northernmost  regions.  Sweden  is  strong  on 
upskilling  and  reskilling 
in  declining  and 
transforming  sectors  with  a  significant 
increase  recently  in  participation  in  learning 
activities  (see  Annex  8).  Strengthening  this 
ongoing  trend  and  ensuring  that  more  people 
will be able to find jobs in the green economy, 
will also help Sweden reach its 2030 national 
skills  target  of  at 
least  60%  of  adults 
participating in training every year. 

12 

 
 
 
 
KEY FINDINGS 

Sweden’s  recovery  and  resilience  plan 
includes measures to address a series of 
structural challenges through:  

  Addressing  the  long-standing  educational 
disparities  for  disadvantaged  groups,  as 
well as the shortage of qualified teachers. 

in 

  Further  decarbonising  the  economy  by 
the 
removing  capacity  constraints 
electricity  grid through further investments 
to accommodate the increasing deployment 
of  renewable  energy,  by  streamlining  and 
for 
accelerating  permitting  procedures 
renewables,  improving  energy  efficiency, 
and further improving green skills levels. 

  Boosting investment in the decarbonisation 
of emission-intensive industries to increase 
their  competitiveness  and 
incentivising 
regional and local initiatives to help reduce 
greenhouse gas emissions. 

  Enhancing  the  accessibility  of  broadband 
connectivity  and  establishing  a  shared 
public 
digital 
administration. 

infrastructure 

for 

  Removing  existing  constraints  to  improve 
the  accessibility,  capacity  and  resilience  of 
the health and long-term care system. 

  Improving  the  effectiveness  of  financial 

supervision on money laundering. 

Sweden  should  proceed  with  the  steady 
implementation  of  its  recovery  and  resilience 
plan  and  swiftly  finalise  the  REPowerEU 
chapter  with  a  view  to  rapidly  starting  its 
implementation. 

Beyond  the  reforms  and  investments  in 
the RRP, Sweden would benefit from: 

  Reducing  macro-economic  vulnerabilities 
from  the  housing  market  and  household 
debt,  driven  by 
incentives  and 
exacerbated  by  bottlenecks  in  construction 
and rental regulations; 

tax 

  Boosting  the  educational  outcomes  and 
employment 
vulnerable 
prospects 
groups,  particularly  migrants  and  those  in 
need  of  additional  upskilling  and  reskilling, 
through  focused  policy  measures  to  help 
these groups find or stay in work; 

of 

13 

 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Cross-cutting indicators 

A1.  Sustainable Development Goals 

A2.  Progress in the implementation of country-specific recommendations 

A3.  Recovery and resilience plan - overview 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy security and affordability 

A8.  Fair transition to climate neutrality 

Productivity 

A9.  Resource productivity, efficiency and circularity 

A10.  Digital transformation 

A11.  Innovation 

A12.  Industry and single market 

A13.  Public administration 

Fairness 

A14.  Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

A15.  Education and training 

A16.  Health and health systems 

A17.  Economic and social performance at regional level 

Macroeconomic stability 

A18.  Key financial sector developments 

A19.  Taxation 

A20.  Table with economic and financial indicators 

A21.  Debt sustainability analysis 

A22.  Macroeconomic imbalance procedure assessment matrix 

17 

20 

20 

22 

25 

27 

29 

30 

30 

34 

38 

41 

41 

43 

46 

48 

52 

54 

54 

56 

58 

60 

62 

62 

64 

66 

67 

70 

 
 
 
LIST OF TABLES 

A2.1. 
Summary table on 2019-2022 CSRs 
A3.1. 
Key elements of the Sweden’s RRP 
A5.1. 
Resilience indices summarising the situation across RDB dimensions and areas 
A6.1. 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
A7.1. 
Key energy indicators 
A8.1. 
Key indicators for a fair transition in Sweden 
A9.1. 
Overall and systemic indicators on circularity 
A10.1.  Key Digital Decade targets monitored by DESI indicators 
A11.1.  Key innovation indicators 
A12.1. 
Industry and the Single Market 
A13.1.  Public administration indicators 
A14.1.  Social Scoreboard for Sweden 
A14.2.  Situation of Sweden on 2030 employment, skills and poverty reduction targets 
A15.1.  EU-level targets and other contextual indicators under the European Education Area strategic framework 
A16.1.  Key health indicators 
A17.1.  Selected indicators at the regional level – Sweden 
A18.1.  Financial soundness indicators 
A19.1.  Taxation indicators 
A20.1.  Key economic and financial indicators 
A21.1.  Debt sustainability analysis - Sweden 
A21.2.  Heat map of fiscal sustainability risks - Sweden 
A22.1.  Assessment of macroeconomic imbalances matrix 

LIST OF GRAPHS 

Progress towards the SDGs in Sweden in the last 5 years 
Sweden’s progress on the 2019-2022 CSRs (2023 European Semester) 
Share of RRF funds contribution to each policy pillar 
Total grants disbursed under the RRF 
Fulfilment status of milestones and targets 
Cohesion policy funds 2021-2027 in Sweden: budget by fund 
Synergies between cohesion policy funds and the RRF six pillars in Sweden 
Cohesion policy funds contribution to the SDGs in 2014-2020 and 2021-2027 in Sweden 
Thematic – greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2021 
Energy mix (top) and electricity mix (bottom), 2021 
Thematic – environmental investment needs and current investment, p.a. 2014-2020 
Underground storage levels in Sweden 
Share of gas consumption per sector, 2021 
Gas consumption per industrial sector (% of total industry gas consumption) 
Sweden´s retail energy prices for industry (top) and households (bottom) 
Fair transition challenges in Sweden 
Distributional impacts of energy prices due to rising energy expenditure (2021-2023) 
Trend in material use 
Treatment of municipal waste 

A1.1. 
A2.1. 
A3.1. 
A3.2. 
A3.3. 
A4.1. 
A4.2. 
A4.3. 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2. 
A7.3. 
A7.4. 
A8.1. 
A8.2. 
A9.1. 
A9.2. 
A11.1.  R&D intensity (Gross domestic expenditure on R&D as % of GDP) 2010-2021 
A12.1.  Labour productivity by sector 
A12.2.  Business environment and productivity drivers 
A13.1.  Sweden. Stakeholder engagement 
A13.2.  Sweden. Ex post evaluation of legislation 
A15.1.  Unqualified teachers in compulsory schools (ISCED 1-2) in Sweden according to their qualification status in 2020/2021 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2019-2070 
A17.1.  Average GDP per capita growth vs GDP per capita in 2010 
A17.2.  Real labour productivity in Sweden, 2000-2019 
A18.1.  Evolution of credit activity 
A19.1.  Tax revenues from different tax types as % of total taxation 

18 

23 
25 
29 
30 
34 
38 
42 
43 
46 
48 
53 
54 
55 
56 
58 
61 
62 
64 
66 
69 
69 
71 

21 
22 
25 
26 
26 
27 
27 
28 
30 
31 
32 
34 
34 
35 
35 
38 
39 
41 
41 
46 
48 
51 
52 
52 
56 
58 
58 
60 
60 
62 
65 

 
 
A19.2.  Tax wedge for single and second earners as a % of total labour costs, 2022 

LIST OF MAPS 

A17.1.  Regional Competitiveness index 2022 - Sweden 

65 

61 

19 

 
 
 
 
 
CROSS-CUTTING INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

This  Annex  assesses  Sweden’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  four  dimensions  of  competitive 
sustainability.  The  17  SDGs  and  their  related 
indicators  provide  a  policy  framework  under  the 
UN’s  2030  Agenda  for  Sustainable  Development. 
The  aim  is  to  end  all  forms  of  poverty,  fight 
inequalities  and  tackle  climate  change  and  the 
environmental crisis, while ensuring that no one is 
left  behind.  The  EU  and  its  Member  States  are 
committed  to  this  historic  global  framework 
agreement  and  to  playing  an  active  role  in 
maximising  progress  on  the  SDGs.  The  graph 
below  is  based  on  the  EU  SDG  indicator  set 
developed  to monitor progress  on  the  SDGs  in  an 
EU context. 

related 

Sweden  performs  well  on  most  of  the  SDG 
environmental 
indicators 
sustainability (SDGs 2, 6, 7, 9, 11, 12, 13, 15), 
but needs to catch up with the EU average on 
others  (SDGs  12,  14).  Sweden  performs  very 

to 

well  on  SDG  13 
(Climate  action)  with  net 
greenhouse gas emissions falling from 1.8 tonnes 
per  capita  in  2016  to  0.9  tonnes  in  2021,  well 
below  the  EU  average  (7.4  tonnes  in  2021).  The 
share  of  renewable  energy  in  gross  final  energy 
consumption  (SDG  7)  also  increased  from  52.6% 
in 2016 to 62.6% in 2021, which is visibly  above 
the EU average (21.8% in 2021). As concerns SGD 
9 (Industry, Innovation and Infrastructure), Sweden 
scores above the EU average on all indicators. The 
gross  domestic  expenditure  on  R&D  has  further 
increased from 3.25% of GDP in 2016 to 3.35% of 
GDP  in  2021.  Furthermore,  the  share  of  R&D 
personnel has increased from 1.79% of the active 
population in 2016 to 2.17% in 2021. The circular 
material  use  rate  (SDG  12)  slightly  decreased, 
from 6.8% in 2016 to 6.6% in 2021, moving away 
from the EU average (11.7% in 2021). In terms of 
SDG  14  (Life  below  water),  Sweden  is  not  only 
performing  below  the  EU  average  on  certain 
indicators but is also moving away from the SDGs. 
Measures  in  the  Swedish  recovery  and  resilience 
plan  (RRP)  support  the  acceleration  of  the  green 

Graph A1.1: Progress towards the SDGs in Sweden in the last 5 years 

For detailed datasets on the various SDGs, see the annual Eurostat report ‘Sustainable development in the European Union’; for 
details on extensive country-specific data on the short-term progress of Member States: Key findings – Sustainable development 
indicators - Eurostat (europa.eu). The status of each SDG in a country is the aggregation of all the indicators for the specific goal 
compared to the EU average. A high status does not mean that a country is close to reaching a specific SDG, but signals that it is 
doing better than the EU on average. The progress score is an absolute measure based on the indicator trends over the past 5 
years. The calculation does not take into account any target values as most EU policy targets are only valid for the aggregate EU 
level. Depending on data availability for each goal, not all 17 SDGs are shown for each country. 
Source: Eurostat, latest update of early April 2023, except for the EU Labour Force Survey (LFS) indicators released on 27 April 
2023. Data mainly refer to 2016-2021 or 2017-2022. 

20 

 
 
 
 
 
 
 
(EU  average:  22.4% 
in  2021).  However,  the 
material footprint (24.2 tonnes per capita in 2021) 
is still well below the EU average (13.7 tonnes per 
capita in 2021). In terms of SDG 16 (Peace, justice, 
and  strong  institutions),  Sweden  performs  above 
the EU average for most indicators but there is an 
overall  negative  trend.  However,  the  share  of  the 
population  who  perceive  the  independence  of  the 
justice system as very and fairly good has slightly 
increased from 72% in 2017 to 74% in 2022 (EU 
average:  53%  in  2022).  The  RRP  is  aimed  at 
helping preserve the sustainability of the Swedish 
economic  model,  and  therefore  contributes  to 
macroeconomic  stability  through  reforms  tackling 
the demographic challenges. 

As the SDGs form an overarching framework, any 
links  to  relevant  SDGs  are  either  explained  or 
depicted with icons in the other Annexes. 

transition  of  carbon-intensive  sectors,  such  as 
transport and economy. 

Sweden  performs  well  on  most  SDG 
indicators related to fairness (SDGs 1, 3, 4, 8, 
10),  but  is  moving  away  from  the  SDGs  on 
others  (SDG  5).  Sweden  performs  very  well  on 
the  indicators  for  SDG  3  (Good  health  and  well-
being)  and  has  one  of  the  highest  employment 
rates  in  the  EU  (SDG  8;  80.7%  in  2021;  EU 
average:  73.1%).  There  has  been  a  slight 
improvement  on  SDG  10  (Reduced  inequalities). 
However, the gap between EU and non-EU citizens 
in  terms  of  employment  rates  (29.5%  in  2021) 
remains wide compared to the EU average (14.9% 
in  2021).  The  share  of  early 
leavers  from 
education and training (SDG 4) has increased from 
7.4% in 2016 to 8.4% in 2021, but remains below 
the  EU  average (9.7% in 2021).  Regarding  SDG  5 
(Gender equality), there has been a negative trend 
on  some  indicators.  However,  overall  Sweden  still 
performs better than the EU average. The Swedish 
RRP includes measures to increase the number of 
study 
training 
opportunities  for  those  in  vocational  and  adult 
education.  

provide  more 

places  and 

Sweden  performs  well  on  SDG  indicators  on 
productivity (SDGs 4, 8, 9).  Sweden’s share of 
gross  domestic  expenditure  on  R&D  (SDG  9) 
remains high, increasing between 2016 and 2021 
(from 3.25% to 3.35% of GDP), and well above the 
EU average (2.27% of GDP in 2021). The share of 
households  with  a  high-speed  internet  connection 
in  Sweden  is  also  visibly  above  the  EU  average 
(SDG  9;  82.5%  in  2021;  EU  average  70.2%).  In 
terms  of  SDG  4  (Quality  education),  Sweden 
performs  well  on  adult  participation  in  learning 
(34.7%  compared  to  the  EU  average  of  10.8%  in 
2021)  and  has  a  high  share  of  adults  in  with  at 
least  basic  digital  skills  (66.5%  in  2021).  To 
strengthen  digital  skills  and 
increase  human 
capital, the RRP supports measures to increase the 
number  of  study  places  in  higher  vocational 
education  and  ensure  resources  for  universities 
and  higher  education  institutions.  The  RRP  also 
provides  funding  for  investment  in  broadband 
expansion. 

Sweden  performs  well  on  SDG  indicators 
related  to  macroeconomic  stability  (SDGs  8, 
17),  but  is  moving  away  from  the  SDGs  on 
others  (SDG  16).  Sweden  performs  well  on  SDG 
8  and  increased  its  share  of  GDP  allocated  for 
investment from 24.2% in 2016 to 25.6% in 2021 

21 

 
 
ANNEX 2: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 

The Commission has assessed the 2019-2022 
country-specific  recommendations  (CSRs) (21) 
addressed to Sweden as part of the European 
Semester.  These  recommendations  concern  a 
wide  range  of  policy  areas  that  are  related  to  10 
of  the  17  Sustainable  Development  Goals  (see 
Annexes  1  and  3). The  assessment  considers  the 
policy action taken by Sweden to date (22) and the 
commitments  in  its  recovery  and  resilience  plan 
(RRP) (23).  At  this  stage  of  RRP  implementation, 
overall,  73%  of  the  CSRs  focusing  on  structural 
issues  from  2019-2022  have  recorded  at  least 
‘some  progress’,  while  18%  recorded  ‘limited 
progress’ 
is 
implemented  further,  considerable  progress  in 
addressing structural CSRs is expected in the years 
to come. 

(see  Graph  A2.1).  As  the  RRP 

Graph A2.1: Sweden’s progress on the 2019-2022 
CSRs (2023 European Semester) 

Source: European Commission 

(21)  2022 CSRs: EUR-Lex - 32022H0901(27) - EN - EUR-Lex 

(europa.eu) 

      2021 CSRs: EUR-Lex - 32021H0729(28) - EN - EUR-Lex 

(europa.eu) 
2020 CSRs: EUR-Lex - 32020H0826(27) - EN - EUR-Lex 
(europa.eu) 
2019 CSRs: EUR-Lex - 32019H0905(27) - EN - EUR-Lex 
(europa.eu) 

(22)  Including policy action reported in the national reform 

programme and in Recovery and Resilience Facility (RRF) 
reporting (twice a year reporting on progress in implementing 
milestones and targets and resulting from the payment 
requests assessment). 

(23)  Member States were asked to effectively address all or a 

significant subset of the relevant country-specific 
recommendations issued by the Council in 2019 and 2020 in 
their RRPs. The CSR assessment presented here considers the 
degree of implementation of the measures included in the 
RRP and of those carried out outside of the RRP at the time 
of assessment. Measures laid down in the Annex of the 
adopted Council Implementing Decision on approving the 
assessment of the RRP, which are not yet adopted or 
implemented but considered credibly announced, in line with 
the CSR assessment methodology, warrant ‘limited progress’. 
Once implemented, these measures can lead to 
‘some/substantial progress or full implementation’, 
depending on their relevance. 

22 

No progress9%Limited progress18%Some progress40%Substantial progress21%Full implementation12% 
 
                                                 
   
 
Table A2.1: Summary table on 2019-2022 CSRs 

(Continued on the next page) 

23 

SwedenAssessment in May 2023*RRP coverage of CSRs until 2026Relevant SDGs2019 CSR 1Limited progressAddress risks related to high household debt by gradually reducing the tax deductibility of mortgage interest payments or increasing recurrent property taxes.No progressSDG 8Stimulateinvestmentinresidentialconstructionwhereshortagesaremostpressing, in particular by removing structural obstacles to construction. Limited progressRelevant RRP measures planned as of 2020, 2021, 2022 and 2023 SDG 8Improve the efficiency of the housing market, including by introducing more flexibility in rental prices and revising the design of the capital gains tax.Some ProgressRelevant RRP measures planned as of 2020, 2021, 2022 and 2023 SDG 82019 CSR 2Some progressFocus investment related economic policy on education and skillsSome progressRelevant RRP measures planned as of 2021, 2022, 2023 and 2024SDG 4, 10, 11, maintaining investment in sustainable transport to upgrade the different transport modes, in particular railwaysSubstantial progressRelevant RRP measures planned as of 2021, 2022, 2023 and 2024SDG 10, 11, and research and innovation, taking into account regional disparities.Some progressRelevant RRP measures planned as of 2021, 2022, 2023 and 2024SDG 9, 10, 112019 CSR 3Substantial ProgressEnsure effective supervision and the enforcement of the anti-money laundering framework.Substantial ProgressRelevant RRP measures planned as of 2020, 2021, 2022 and 2023 SDG 8, 162020 CSR 1Substantial progressInlinewiththegeneralescapeclause,takeallnecessarymeasurestoeffectivelyaddressthepandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuringdebtsustainability, while enhancing investment.Not relevant anymoreNot applicableSDG 8, 16Ensuretheresilienceofthehealthsystem,includingthroughadequatesupplies of critical medical products, infrastructure and workforce.Substantial progressRelevant RRP measures planned as of 2021, 2022, 2023 and 2024SDG 32020 CSR 2Some progressFoster innovationSome ProgressRelevant RRP measures planned as of 2025SDG 9and support education and skills development.Some progressRelevant RRP measures planned as of 2021, 2022, 2023 and 2024SDG 4Front-load mature public investment projects and Limited progressRelevant RRP measures planned as of 2021, 2022, 2023, 2024 and 2025SDG 8, 16promote private investment to foster the economic recovery.Some progressSDG 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticularoncleanand efficient production and use of energy,Limited ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024 and 2025SDG 7, 9, 13high-tech and innovative sectors, Some progressSDG 95G networksFull implementationSDG 9and sustainable transport.Substantial ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024 and 2025SDG 112020 CSR 3Substantial progressImprovetheeffectivenessofanti-moneylaunderingsupervisionandeffectively enforce the anti-money laundering framework.Substantial progressRelevant RRP measures planned as of 2020 and 2023SDG 8, 162021 CSR 1Substantial progressIn2022,maintainasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilienceFacility,andpreservenationallyfinancedinvestment.Some ProgressNot applicableSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainabilityinthemedium term.Full implementationNot applicableSDG 8, 16Atthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupporting the green and digital transition.Full ImplementationNot applicableSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacy and sustainability of health and social protection systems for all.Substantial progressNot applicableSDG 8, 16 
 
 
 
  
 
Table (continued) 

Note:            
* See footnote (23). 
** RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the 
RRP are necessary to fully implement CSRs and address their underlying challenges. Measures indicated as 'being implemented' 
are only those included in the RRF payment requests submitted and positively assessed by the European Commission.  
Source: European Commission. 

24 

2022 CSR 1Some ProgressIn2023,ensurethatthegrowthofnationallyfinancedprimarycurrentexpenditureisinlinewithanoverallneutralpolicystance,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadyto adjust current spending to the evolving situation. Full ImplementationsNot applicableSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguse of the Recovery and Resilience Facility and other Union funds. Some ProgressNot applicableSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudent medium-term fiscal positions. Full ImplementationNot applicableSDG 8, 16Reducerisksrelatedtohighhouseholddebtandhousingmarketimbalancesbyreducingthetaxdeductibilityofmortgageinterestpaymentsorbyincreasing recurrent property taxes.No ProgressSDG 8, 10, 12Stimulateinvestmentinresidentialconstructiontoeasethemosturgentshortages,inparticularbyremovingstructuralobstaclestoconstructionandby ensuring the supply of buildable land.Limited ProgressRelevant RRP measures planned as of 2020, 2021, 2022 and 2023 SDG 8, 9Improvetheefficiencyofthehousingmarket,includingbyintroducingreforms to the rental market.Limited ProgressSDG 82022 CSR 2Proceedwiththeimplementationofitsrecoveryandresilienceplan,inlinewiththemilestonesandtargetsincludedintheCouncilImplementingDecision of 4 May 2022. SwiftlyfinalisethenegotiationswiththeCommissionofthe2021-2027cohesionpolicyprogrammingdocumentswithaviewtostartingtheirimplementation.2022 CSR 3Limited ProgressReducetheimpactthatpupils’socio-economicandmigrantbackgroundshaveontheireducationaloutcomesbyprovidingequalaccessopportunitiesto schools and by addressing the shortages of qualified teachers. Limited ProgressRelevant RRP measures planned as of 2021, 2022, 2023 and 2024SDG 4, 8, 10Developskillsofdisadvantagedgroups,includingpeoplefrommigrantbackgrounds,byadaptingresourcesandmethodstotheirneedstohelptheirintegration into the labour market.Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023 and 2024SDG 4, 8, 102022 CSR 4Limited ProgressReduce overall reliance on fossil fuels Some ProgressSDG 7, 9, 13byacceleratingthedeploymentofrenewablesandboostingcomplementaryinvestmentinnetworkinfrastructure,strengtheninginternalgridswithinthecountry to ensure sufficient network capacity,Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024 and 2025SDG 7, 9, 13 improving energy efficiency, Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023 and 2025SDG 7andfurtherstreamliningpermittingproceduresinrelationtorenewableenergy projects.No ProgressSDG 7, 9, 13RRP implementation is monitored by assessing RRP payment requests and analysing reports published twice a year on the achievement of the milestones and targets. These are to be reflected in the country reports. Progress on the cohesion policy programming documents is monitored under the EU cohesion policy. 
 
  
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN - OVERVIEW 

Sweden’s  progress  in  implementing  its  plan 
is  published  in  the  Recovery  and  Resilience 
Scoreboard (24).  The  Scoreboard  also  gives  an 
overview  of  the  progress  made  in  implementing 
the RRF as a whole, in a transparent manner. The 
graphs below show the current state of play of the 
milestones  and  targets  to  be  reached  by  Sweden 
and  subsequently  assessed  as  satisfactorily 
fulfilled by the Commission. 

The  Recovery  and  Resilience  Facility  (RRF)  is 
the centrepiece of the EU’s efforts to help it 
recover  from  the  COVID-19  pandemic,  speed 
up  the  twin  transition  and  strengthen 
resilience  against  future  shocks.  The  RRF 
also  contributes  to  implementation  of  the 
SDGs  and  helps  to  address  the  Country 
Specific  Recommendations  (see  Annex 4). 
recovery  and 
Sweden  submitted 
resilience  plan 
(RRP)  on  28  May 2021.  The 
Commission’s  positive  assessment  on  28  March 
2022  and  Council’s  approval  on  4  May  2022 
paved  the  way  for  disbursing  EUR 3.3  billion  in 
grants under the RRF over the 2021-2026 period.   

its  current 

Table A3.1: Key elements of the Sweden’s RRP 

Source: European Commission  

Since  the  entry 
into  force  of  the  RRF 
Regulation  and  the  assessment  of  the 
national  recovery  and  resilience  plans, 
geopolitical  and  economic  developments 
have caused major disruptions across the EU. 
In  order  to  effectively  address  these  disruptions, 
the  (adjusted)  RRF  Regulation  allows  Member 
States to amend their recovery and resilience plan 
for  a  variety  of  reasons.  In  line  with  article  11(2) 
of the RRF, the maximum financial contribution for 
Sweden  was moreover  updated  on  30  June  2022 
to an amount of EUR 3.18 billion in grants. Sweden 
has not submitted its request for RRP amendment 
by the time of publication of this report. 

No  funds  have  so  far  been  disbursed  to 
Sweden  under  the  RRF.  The  Sweden  has  not 
submitted  request  to  Commission  to  disburse 
equivalent  to  13%  of  the  financial  allocation. 
Sweden  has  not  submitted  yet  the  first  payment 
request. 

(24)  https://ec.europa.eu/economy_finance/recovery-and-

resilience-scoreboard/country_overview.html 

25 

Current RRPScope Initial planCID adoption date4 May 2022Total allocation E UR 3.3 billion in grants (0.6% of 2021 GDP)Investments and reforms 12 investments and 15 reformsTotal number of milestones and targets56 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
 
Graph A3.1: Share of RRF funds contribution to each policy pillar 

Note: Each measure contributes towards two policy areas of the six pillars, therefore the total contribution to all pillars displayed 
on this chart amounts to 200% of the estimated cost of the RRP. The bottom part represents the amount of the primary pillar, the 
top part the amount of the secondary pillar. 
Source: RRF Scoreboard https://ec.europa.eu/economy_finance/recovery-and-resilience-scoreboard/country_overview.html 

Graph A3.2: Total grants disbursed under the RRF 

Graph A3.3: Fulfilment status of milestones and 
targets 

Note: This graph displays the amount of grants disbursed so 
far under the RRF. Grants are non-repayable financial 
contributions. The total amount of grants given to each 
Member State is determined by an allocation key and the 
total estimated cost of the respective RRP. 
Source: RRF Scoreboard 
https://ec.europa.eu/economy_finance/recovery-and-resilience-
scoreboard/country_overview.html 

This graph displays the share of satisfactorily fulfilled 
milestones and targets. A milestone or target is satisfactorily 
fulfilled once a Member State has provided evidence to the 
Commission that it has reached the milestone or target and 
the Commission has assessed it positively in an implementing 
decision. 
Source: RRF Scoreboard 
https://ec.europa.eu/economy_finance/recovery-and-resilience-
scoreboard/country_overview.html 

26 

€ 0billionSatisfactorily fulfilledNot fulfilled0%10%20%30%40%50%60%70%Green transitionDigitaltransformationSmart,sustainable andinclusive growthSocial andterritorialcohesionHealth, andeconomic, socialand institutionalresiliencePolicies for thenext generation 
   
 
   
  
 
 
     
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

The  EU  budget  of  over  EUR  1.2  trillion  for 
2021-2027  is  geared  towards  implementing 
the  EU’s  main  priorities.  Cohesion  policy 
investment amounts to EUR 392 billion across the 
EU and represents almost a third of the overall EU 
budget, including around EUR 48 billion invested in 
line with REPowerEU objectives.  

Graph A4.1: Cohesion policy funds 2021-2027 in 
Sweden: budget by fund 

(1) million EUR in current prices, % of total; (total amount 
including EU and national co-financing) 
Source: European Commission, Cohesion Open Data 

In  2021-2027,  in  Sweden,  cohesion  policy 
funds (25)  will  invest  EUR  1.1  billion  in  the 
green  transition  and  EUR  194  million  in  the 
digital  transformation  as  part  of  the 
country’s total allocation of EUR 4 billion.  In 
particular,  the  European  Regional  Development 
Fund  (ERDF) will  lead  to  a  more  competitive  and 
smarter Sweden, improving digitalisation, research 
and  innovation  for  citizens,  23 500  businesses, 
organisations  and  public  authorities. 
It  will 
increase  R&D  investment  by  SMEs,  foster  the 
development  of  new  products,  processes  and 
business models, and establish new test beds and 
innovation environments close to the market. 450 
companies  will  receive  support  to  become  more 
energy efficient and reduce their CO2 emissions by 
2,49  tonnes  CO2  eq./year.  Particular  attention 
should  be  paid  to  monitoring  the  decrease  in 
emissions,  which  is  a  priority  in  2021-2027.  The 
the 
Just  Transition  Fund  will  contribute 
transformation  of  the  steel,  mineral  and  metals 
industries  and  target  Emissions  Trading  System 
(ETS)  installations  with  high  emissions  so  that 
substantial  CO2  reductions  are  possible.  These 
efforts will contribute to a decrease of 2 790 000 
tonnes  CO2  eq./year  at  regional,  national  and,  by 

to 

(25)  European Regional Development Fund (ERDF), European 
Social Fund+ (ESF+), Just Transition Fund (JTF), excluding 
Interreg programme. The total amount includes national and 
EU contributions. Data source: Cohesion Open Data.  

extension,  global  level. Under  the  European  Social 
Fund Plus (ESF+), Sweden allocates more than EUR 
350 million to social inclusion, of which EUR 10.6 
million  is  dedicated  to  fighting  child  poverty. 
Investments  will,  for  example,  support  schools  in 
areas  facing  socio-economic  challenges,  with 
measures on homework support, leisure activities, 
language  support.  These  measures  are 
and 
link  between 
expected  to  help  weaken  the 
and 
students’ 
learning outcomes. 

socio-economic 

backgrounds 

Of  the  investments  mentioned  above,  EUR 
169  million  will  be  invested  in  line  with 
REPowerEU objectives. This is on top of the EUR 
172  million  dedicated  to  REPowerEU  under  the 
2014-2020  budget.  EUR  51  million  (2021-2027) 
and EUR 169 million (2014-2020) is for improving 
energy efficiency; EUR 54 million (2021-2027) and 
EUR  3  million  (2014-2020)  is  for  renewable 
energy  and  low-carbon  R&I;  and  EUR  64  million 
(2021-2027) is for smart energy systems. 

Graph A4.2: Synergies between cohesion policy 
funds and the RRF six pillars in Sweden 

(1) million EUR in current prices (total amount, including EU 
and national co-financing)   
Source: European Commission  

In  2014-2020,  cohesion  policy  funds  made 
EUR  2.1  billion  available  to  Sweden (26),  with 
an  absorption  of  68% (27). 
Including  national 
financing,  the  total  investment  amounts  to  EUR 
3.8  billion,  representing  around  0.1%  of  GDP  for 
2014-2020.  

Sweden  continues  to  benefit  from  cohesion 
policy 
support  economic 
to 
recovery,  step  up  convergence  and  provide 

flexibility 

(26)  Cohesion policy funds include the ERDF, ESF and YEI (Youth 
Employment Initiative). ETC programmes are excluded here. 
According to the ‘N+3 rule’, the funds committed for 2014-
2020 must be spent by 2023. REACT-EU is included in all 
figures. The total amount includes EU and national co-
financing. Data source: Cohesion Open Data. 

(27)  2014-2020 Cohesion policy EU payments by MS is updated 

daily on Cohesion Open Data.   

27 

2 088 52%1 626 40%311 8%ERDFESF+JTF3592051 2821 758131 1041941 0191 5630200400600800100012001400160018002000Green transitionDigitaltransformationSmart, sustainableand inclusive growthSocial and territorialcohesionHealth, economic,social andinstitutionalresiliencePolicies for the nextgenerationEU CP 2014-2020 (million EUR)EU CP 2021-2027 (million EUR) 
 
   
 
                                                 
   
                                                 
 
 
transition  of 

the  sustainable 

sectors.  Actions 

vital support to regions following the COVID-
19  pandemic.  The  Recovery  Assistance  for 
Cohesion and the Territories of Europe instrument 
(REACT-EU) (28)  under  NextGenerationEU  provides 
EUR  366  million  on  top  of  the  2014-2020 
cohesion  policy  allocation  for  Sweden.  REACT-EU 
supported 
the 
Swedish  businesses  that  were  worst  hit  by  the 
COVID-19  crisis,  including  in  the  tourism  and 
hospitality 
digital 
transformation,  transition  to  a  green  and  low-
carbon  economy  increased  resource  efficiency,  as 
well as labour market training, guidance and skills 
development.  In  addition,  EUR  137  million  was 
provisionally  allocated  to  Sweden  through  the 
Brexit  Adjustment  Reserve  (BAR) (29).  With  SAFE 
(Supporting  Affordable  Energy),  the  2014-2020 
cohesion  policy  funds  may  also  be  mobilised  by 
Sweden  to  support  vulnerable  households,  jobs 
and  companies  particularly  affected  by  high 
energy prices.  

include 

Graph A4.3: Cohesion policy funds contribution to 
the SDGs in 2014-2020 and 2021-2027 in 
Sweden 

(1) 5 largest contributions to SDGs in million (EUR) current 
prices 
Source: European Commission 

In both 2014-2020 and 2021-2027, cohesion 
policy  funds  have  contributed  substantially 
the  Sustainable  Development  Goals 
to 
(SDGs).  These  funds  support  9  of  the  17  SDGs, 
notably SDG 8 ‘Decent work and economic growth’ 
and SDG 9 ‘Industry, innovation, infrastructure’.  

Other EU funds provide significant support to 
Sweden.  The  common  agricultural  policy  (CAP) 

(28)  REACT-EU allocation on Cohesion Open Data. 

(29)  Sweden will transfer EUR 66 million from the BAR to 

REPowerEU. This transfer is not factored in the amounts 
provided. 

Fund 

two  CAP  Funds 

made EUR 8.4 billion available in 2014-2022 and 
will keep supporting Sweden with EUR 4.5 billion in 
2023-2027.  The 
(European 
Agricultural  Guarantee  Fund  and  European 
Agricultural 
for  Rural  Development) 
contribute  to  the  European  Green  Deal  while 
ensuring  long-term  food  security.  They  promote 
social,  environmental  and  economic  sustainability 
and  innovation  in  agriculture  and  rural  areas,  in 
coordination  with  other  EU  funds.  The  European 
Maritime  and  Fisheries  Fund  made  EUR  120 
million available to Sweden in 2014-2020 and the 
European  Maritime,  Fisheries  and  Aquaculture 
Fund allocates EUR 116 million in 2021-2027.  

Sweden  also  benefits 
from  other  EU 
programmes,  notably  the  Connecting  Europe 
Facility,  which  under  CEF  2  (2021-2027)  has  so 
far  allocated  EU  funding  of  EUR  136.3  million  to 
nine  specific  projects  on  strategic 
transport 
networks.  Similarly,  Horizon  Europe  has  so  far 
allocated  more  than  EUR  365  million  to  Swedish 
R&I on top of the EUR 2.3 billion earmarked under 
the  previous  programme  (Horizon  2020).  The 
Public  Sector  Loan  Facility  set  up  under  the  Just 
Transition  Mechanism  makes  EUR  12  million  of 
grant  support  from  the  Commission  available  for 
projects located  in  Sweden  for  2021-2027,  which 
will  be  combined  with  loans  from  the  EIB  to 
support  investments  by  public  sector  entities  in 
just transition regions.  

Instrument 
designing 

(TSI) 
The  Technical  Support 
and 
supports 
in 
Sweden 
implementing  growth-enhancing 
reforms, 
including  those  set  out  in  its  recovery  and 
resilience  plan  (RRP).  Sweden  has  received 
significant  support  since  2018.  Examples (30) 
include  support  for  developing  a  strategy  and 
actions  to  improve  coordination,  foresight  and 
preparedness  for  crises  like  COVID-19,  and  for 
building 
green 
for 
development  in  the  northern  sparsely  populated 
areas.  

sustainable 

capacities 

(30)  Country factsheets on reform support are available here. 

28 

1.7897323381511.8661.16718518218002004006008001.0001.2001.4001.6001.8002.000SDG 9 Industry,innovation,infrastructureSDG 8 Decent workand economicgrowthSDG 13 ClimateactionSDG 1 No povertySDG 12ResponsibleconsumptionEU CP 2014-2020 (millions EUR)EU CP 2021-2027 (millions EUR) 
  
                                                 
                                                 
ANNEX 5: RESILIENCE 

This  Annex 
illustrates  Sweden’s  relative 
resilience capacities and vulnerabilities using 
the  Commission’s 
resilience  dashboards 
(RDB) (31).  Comprising  a  set  of  124  quantitative 
indicators,  the  RDB  provide  broad  indications  of 
Member  States’  ability  to  make  progress  across 
four interrelated dimensions: social and economic, 
green, digital, and geopolitical. The indicators show 
vulnerabilities (32)  and  capacities (33)  that  can 
become  increasingly  relevant,  both  to  navigate 
ongoing  transitions  and  to  cope  with  potential 
future shocks. To this end, the RDB help to identify 
areas  that  need  further  efforts  to  build  stronger 
and  more  resilient  economies  and  societies.  They 
in  Table  A5.1  as  synthetic 
are  summarised 
resilience 
illustrate  the  overall 
relative  situation  for  each  of  the  four  dimensions 
and their underlying areas for Sweden and the EU-
27 (34). 

indices,  which 

geopolitical 

indicators. It has medium resilience capacities in 
dimension,  medium-high 
the 
capacities 
in  the  green  dimension  and  high 
capacities  in  the  social  and  economic  and  the 
digital  dimensions.  Sweden  shows  stronger 
capacities  than  the  EU  average  most  notably  in 
the areas of ‘inequalities and the social impact of 
the  transitions’,  ‘climate  change  mitigation  and 
adaptation’  and  the  digitalisation  of  the  personal 
and  public  space.  There  is  room  for  improving 
capacities  compared  to  the  EU  in  relation  to  ‘raw 
material and energy supply’. 

Table A5.1: Resilience indices summarising the 
situation across RDB dimensions and areas 

According  to  the  set  of  resilience  indicators 
under  the  RDB,  Sweden  generally  displays  a 
lower  level  of  vulnerabilities  compared  to 
the  EU  average.  Sweden  displays  medium 
vulnerabilities  in  the  geopolitical  dimension  and 
medium-low  vulnerabilities 
in  the  social  and 
economic, the green and digital dimensions of the 
RDB.  It  has  higher  vulnerabilities  than  the  EU 
average 
‘sustainable  use  of 
resources’,  ‘cybersecurity’  and  ‘raw  material  and 
energy  supply’.  Sweden  has 
low 
vulnerabilities  in  all  areas  of  the  social  and 
economic  dimension,  as  well  as  in  the  areas 
‘climate  change  mitigation  and  adaptation’, 
‘ecosystems,  biodiversity,  sustainable  agriculture’ 
and  the  digitalisation  of  the  personal  or  public 
space.  

the  areas 

relatively 

in 

Compared to the  EU  average,  Sweden  shows 
a  higher  level  of  capacities  across  all  RDB 

(31)  For details see https://ec.europa.eu/info/strategy/strategic-
planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en; see also 2020 Strategic 
Foresight Report (COM(2020) 493). 

(32)  Vulnerabilities describe features that can exacerbate the 

negative impact of crises and transitions, or obstacles that 
may hinder the achievement of long-term strategic goals. 

(33)  Capacities refer to enablers or abilities to cope with crises 
and structural changes and to manage the transitions.  

(34)  This Annex is linked to Annex 1 on SDGs, Annex 6 on the 
green deal, Annex 8 on the fair transition to climate 
neutrality, Annex 9 on resource productivity, efficiency and 
circularity, Annex 10 on the digital transition and Annex 14 
on the European pillar of social rights. 

29 

(1) Data are for 2021, and EU-27 refers to the value for the 
EU as a whole. Data underlying EU-27 vulnerabilities in the 
area ‘value chains and trade’ are not available as they 
comprise partner concentration measures that are not 
comparable with Member States’ level values. 
Source: JRC Resilience Dashboards - European Commission 

SEEU-27SEEU-27Vulnerabilities IndexHighMedium-highMediumMedium-lowLowNot availableCapacities IndexHighMedium-highMediumMedium-lowLowNot availableDimension/AreaVulnerabilitiesCapacitiesSocial and economicHealth, education and workInequalities and social impact of the transitionsGreenEconomic & financial stability and sustainabilitySustainable use of resourcesClimate change mitigation & adaptationDigitalEcosystems, biodiversity, sustainable agricultureDigital for industryDigital for personal spaceCybersecurityDigital for public spaceRaw material and energy supplyGeopoliticalValue chains and tradeFinancial globalisationSecurity and demography 
 
                                                 
 
  
 
 
 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

in  several  areas, 

Sweden’s green transition requires continued 
action 
including  the 
deployment  of  renewable  energy  and  energy 
efficiency  measures,  and  strengthening  its 
carbon  sinks 
land  use  sector. 
Implementation  of  the  European  Green  Deal  is 
in  Sweden;  this  Annex  provides  a 
underway 
snapshot of the key areas involved (35). 

in  the 

Sweden  has  not  yet  defined  all  the  climate 
policy  measures  it  needs  to  reach  its  2030 
target  for  the  effort  sharing 
climate 
sectors (36).  Data 
for  2021  on  Sweden’s 
greenhouse  gas  emissions  in  these  sectors  are 
expected to show the country generated less than 
its annual emission allocations (37). Current policies 
in Sweden are projected to reduce these emissions 
by  39%  relative  to  2005  levels  in  2030,  not  a 
sufficient  reduction  to  reach  the  effort  sharing 
target even  before  the  target  was  raised to meet 
the  EU’s  55%  objective,  let  alone  Sweden’s  new 
target  to  reduce  emissions  by  50% (38).  In  its 
recovery and resilience plan, Sweden has allocated 
44.4%  of  its  Recovery  and  Resilience  Facility 
grants  to  key  reforms  and  investments  to  attain 

(35)  The overview in this Annex is complemented by the 

information provided in Annex 7 on energy security and 
affordability, Annex 8 on the fair transition to climate 
neutrality and environmental sustainability, Annex 9 on 
resource productivity, efficiency and circularity, Annex 11 on 
innovation, and Annex 19 on taxation. 

(36)  Member States’ greenhouse gas emission targets for 2030 
(‘effort sharing targets’) were increased by Regulation (EU) 
2023/857 (the Effort Sharing Regulation) amending 
Regulation (EU) 2018/842, aligning the action in the 
concerned sectors with the objective to reach EU-level, 
economy-wide greenhouse gas emission reductions of at 
least 55% relative to 1990 levels. The Regulation sets 
national targets for sectors outside the current EU Emissions 
Trading System, notably: buildings (heating and cooling), road 
transport, agriculture, waste, and small industry. Emissions 
covered by the EU ETS and the Effort Sharing Regulation are 
complemented by net removals in the land use sector, 
regulated by Regulation (EU) 2018/841 (the Land Use, Land 
Use Change and Forestry (LULUCF) Regulation) amended by 
Regulation (EU) 2023/839. 

(37)  Sweden’s annual emission allocations for 2021 were some 
31.2 Mt CO2eq, and its approximated 2021 emissions were 
29.3 Mt (see European Commission, Accelerating the 
transition to climate neutrality for Europe’s security and 
prosperity: EU Climate Action Progress Report 2022, 
SWD(2022)343). 

(38)  See the information on the distance to the 2030 climate 

policy target in Table A6.1. Existing and additional measures 
as of 15 March 2021. 

climate  objectives (39).  Sweden’s  climate  policy 
framework 
from  2017  envisages  net  zero 
greenhouse  gas  emissions  by  2045,  and  negative 
emissions  thereafter.  By  2030,  greenhouse  gas 
emissions  from  domestic  transport  (excluding 
flights)  should  fall  by  at  least  70%  compared  to 
2010, and emissions from Sweden’s effort sharing 
sectors  should  fall  by  at  least  63%  from  1990 
levels (40).  

Graph A6.1: Thematic – greenhouse gas emissions 
from the effort sharing sectors in Mt CO2eq, 
2005-2021 

Source: European Environmental Agency. 

Sweden  faces  a  potential  major  challenge 
related  to  increasing  the  carbon  sink  of  its 
land  use  sector,  with  a  declining  trend  of 
carbon  removals  over  time.  Sweden  is  one  of 
the  EU  Member  States  that  achieves  the  highest 
amount  of  net  carbon  removals  through  its  land 
use, land use change and forestry (LULUCF) sector. 
Sweden achieved net removals of 39 099 kt CO2eq 
(2017-2021  average)  from  the  land  use  sector, 
but the trend of removals has been decreasing. In 
accordance  with  the  revised  LULUCF  Regulation, 
Sweden  will  need  to  achieve  a  total  of  net 
removals  just  under  4  million  tonnes  higher  in 
2030,  compared  to  the  average  level  during  the 
reference  period  2016–2018  (see  Table  A6.1) (41). 
Emissions  from  drained  peatlands  are  relatively 
high  and  the  rewetting  of  these  lands,  from 

(39)  Notably, investment to promote innovative technologies to 
reduce greenhouse gas emissions from industry processes 
(Industry Leap programme) and to reduce greenhouse gas 
emissions through measures at local and regional levels 
(Climate Leap programme), investments in energy efficiency 
in housing, railroads, and forest and nature protection.  

(40)  According to Sweden’s climate policy framework, 2017. The 
national target for the sectors outside the EU Emissions 
Trading System translates into a reduction of greenhouse 
gas emissions by around 51% in 2030 compared to 2005. 

(41)  This value is indicative and will be updated in 2025 (as 

mandated by Regulation (EU) 2023/839). 

30 

05101520253035404520052021Domestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
 
 
                                                 
     
                                                 
 
 
agricultural  land,  is  estimated  to  have  a  high 
potential for carbon removals.  

Graph A6.2: Energy mix (top) and electricity mix 
(bottom), 2021 

considered  sufficiently  ambitious.  Sweden  will 
need to increase its renewable energy target in the 
updated  NECP  to  reflect  the  more  ambitious  EU 
climate  and  energy  targets  in  the  Fit  for  55 
Package  and  in  the  REPowerEU  Plan. The  plan 
currently includes the aim to generate 100% of its 
electricity  from  renewable  energy  by  2040 (42). 
Between  2020  and  2022,  Sweden  more  than 
doubled  its  installed  capacity  of  photovoltaics 
from 1.1 GW to 2.6 GW. Wind generation capacity 
also  increased  quickly  from  10  GW  in  2020  to 
14,5  GW  in  2022.  The  total  capacity  of  hydro 
power  in  Sweden  has  been  stable  over  the  last 
decade  at  16.4  GW.  Under  its  recovery  and 
resilience plan, Sweden supports its ‘Climate Leap’ 
and 
‘Industry  Leap’  programmes.  These  are 
subsidy  schemes  for  local  and  regional  climate 
investments  and  for 
in 
particular  to  fund  the  conversion  to  renewable 
energy for heating in industry and agriculture, the 
production  of  biogas  and  biofuels,  sustainable 
transport and the decarbonisation of industry.  

industrial  processes, 

The energy mix is based on gross inland consumption, and 
excludes heat and electricity. The share of renewables 
includes biofuels and non-renewable waste.  
Source: Eurostat 

In 2021, renewable energy still made up the 
majority  of  Sweden’s  energy  mix,  even 
though production fell, leading to an increase 
in  the  share  of  nuclear  energy.  In  2021, 
renewable  energy  reached  50%  of  Sweden’s 
energy  mix,  followed  by  nuclear  (25%)  and  oil 
(19%).  Coal  (3%)  and  natural  gas  (2%)  provided 
is 
remainder.  Sweden’s  electricity  mix 
the 
composed of 68% of renewable energy, the main 
source being hydropower (43%), followed by wind 
(16%) renewable combustible fuels (8%) and solar 
(1%).  Nuclear  energy  made  up  31%  of  the 
electricity mix. 

In  Sweden,  renewable  energy  capacity  has 
been  growing  steadily  for  years,  picking  up 
speed  especially  over  the  last  two  years. 
Sweden’s  target  of  65%  of  share  of  energy  from 
renewable 
final  energy 
consumption  by  2030  included  in  the  NECP  was 

in  gross 

sources 

Reducing  energy  consumption  by  increasing 
energy  efficiency  is  crucial  for  Sweden.  It 
would  contribute  significantly  to  reducing 
energy  costs  for  both  consumers  and 
businesses.  Sweden’s  NECP  targets  for  primary 
and final energy consumption (PEC and FEC) were 
considered modest in ambition, respectively in the 
2020  Commission  assessment.  Based  on  the 
energy  consumption  trajectory  for  2018-2021, 
Sweden  is  expected  to  be  on  track  to  meet  its 
2030 target for PEC and is expected to be on track 
to  meet  its  2030  target  for  FEC,  as  these  were 
notified  in  its  NECP (43).  The  NECP  sets  the  target 
for  the  country’s  energy  use  in  2030  to  be  50% 
more efficient than it was in 2005, with the target 
expressed in primary energy use in relation to GDP. 
energy 
Though  Sweden 
consumption  from  47.3  Mtoe  in  2018  to  41.3  in 
2020, it increased again to 43.8 Mtoe in 2021. The 
country  must  step  up  measures  taken  to  achieve 
the  2030  national  energy  efficiency  target,  given 
that it will miss the target if the trend in primary 
and  final  energy  consumption  between  2005  and 
2021  continues.  The  national  energy  and  climate 
plan focuses essentially on the buildings, transport 
and industry sectors and lacks quantified evidence 

primary 

cut 

its 

(42)  The new government has moved away from a “100% 

renewables” to a “100% fossil-free” ambition 

(43)  After the conclusion of the negotiations for a recast EED, the 
ambition of both the EU and national targets as well as of 
the national measures for energy efficiency to meet these 
targets is expected to increase 

31 

1%68%31%Solid fossil fuels, peatand oil shaleRenewablesNuclear3%2%19%25%50%Solid fossil fuels, peatand oil shaleGasOilNuclearRenewables 
   
                                                 
on  whether  Sweden  can  meet  the  overall  energy 
efficiency  targets  with  action  in  these  sectors 
alone. 

Graph A6.3: Thematic – environmental investment 
needs and current investment, p.a. 2014-2020 

incineration.  Infrastructure  investment  has  fallen 
short of investment needs in wastewater collection 
and  treatment,  nature-based  solutions  and  flood 
prevention (see also Annex 9). 

floods 

threatening 

Climate change will have significant impacts 
on  Sweden’s  natural  and  built  environment, 
with  major  challenges  to  society.  Projected 
impacts  and  challenges  include  landslides  and 
communities, 
erosion, 
infrastructure,  and  businesses,  and  water 
shortages  affecting 
to  households, 
agriculture,  and  industry (47).  Climate  change  is 
also  expected  to  have  considerable  impacts  on 
Sweden’s  forests.  Sweden  adopted  a  national 
adaptation  strategy  in  March  2018.  To  provide 
financing,  it  has  created  an  adaptation  fund  for 
municipalities.  Sweden  is  one  of  nine  Member 
States  that  have  explicitly  earmarked  a  readily 
available budget for climate adaptation (48). 

supply 

Source: European Commission. 

Sweden would benefit from investing more in 
environmental  protection, 
in  protecting 
biodiversity  and  in  improving  waste  and 
water  management (44).  Between  2014  and 
2020,  the  environmental  investment  needs  were 
estimated  to  be  at  least  EUR 9  billion  while 
investment  was  about  EUR 3.1  billion,  leaving  a 
gap of at least EUR 5.9 billion per year (see Graph 
A6.3) (45).  The  gap 
for 
investment 
ecosystem 
in  biodiversity  and 
protection. Sweden’s land EU Natura 2000 network 
covers  12%  of  its  land (46).  Sweden  has  yet  to 
complete the designation of its network of special 
protection  areas  at  sea,  and  challenges  remain  in 
water  management.  The  eutrophication  of  inland 
and  marine  waters  implies  specific  challenges. 
There  is  a  need  to  develop  waste  treatment 
infrastructure  associated  with  the  higher  steps  of 
the  waste  hierarchy,  in  particular  for  plastic 
packaging  recycling,  to  reduce  the  reliance  on 

is  especially  wide 

(44)  Environmental objectives include pollution prevention and 

control, water management and industries, circular economy 
and waste, biodiversity and ecosystems (European 
Commission, 2022, Environmental Implementation Review, 
country report Sweden) 

(45)  When also accounting for needs estimated at EU level only 

(e.g., water protection, higher circularity, biodiversity 
strategy). 

(46)  In 2021, Sweden had 15.0% terrestrial protected areas 

(Natura 2000 and nationally designated areas), against the 
EU average of 26.4% (European Environment Agency, 2023, 
Natura 2000 Barometer). 

Sweden  still  provides  fossil  fuel  and  other 
environmentally harmful subsidies that could 
be  considered  for  reform,  while  ensuring 
food  and  energy  security  and  mitigating 
social effects. Environmentally harmful subsidies 
have  been  identified,  via  an  initial  assessment,  in 
the  agriculture,  forestry  and  fishing,  electricity, 
gas, steam and air conditioning, transportation and 
storage,  mining  and  quarrying,  manufacturing, 
water  supply,  sewerage,  waste  management  and 
services  sectors.  Examples  of  such  subsidies 
include the excise tax refund and the reduced CO2 
tax rate for diesel used in agriculture, the reduced 
energy  tax  rate  for  light  fuel  oil  used  in  mobile 
machinery, the excise tax exemption on the natural 
gas,  the  reimbursement  of  excise  duty  on  diesel 
used in freight and passenger transport, or the tax 
relief for natural gas for industrial consumers (49). 
A  mapping  of  all  environmentally  harmful 
subsidies  by  Sweden  would  help  prioritise 
candidates for reform. 

(47)  Handlingsplan för Naturvårdsverkets arbete med 

klimatanpassning, 2019. 

(48)  European Environmental Agency, Advancing towards climate 

resilience in Europe, forthcoming. 

(49)  Fossil fuel figures in EUR of 2021 from the 2022 State of 

the Energy Union report. Initial assessment of 
environmentally harmful subsidies done by the Commission 
in the 2022 toolbox for reforming environmentally harmful 
subsidies in Europe, using OECD definitions, and based on 
the following datasets: OECD Agriculture Policy Monitoring 
and Evaluations; OECD Policy Instruments for the 
Environment (PINE) Database; OECD Statistical Database for 
Fossil Fuels Support; IMF country-level energy subsidy 
estimates. Annex 4 of the toolbox contains detailed 
examples of subsidies on the candidates for reform. 

32 

2926711,3354992957428752,1144,9033670100020003000400050006000Pollutionprevention andcontrolWater (industries,excl. protection)Circular Economy(incl. waste)Biodiversity andecosystemsR&I&D and otherEUR million (at current prices)Current investmentTotal need 
     
                                                 
                                                 
Table A6.1: Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources: (1) Historical and projected emissions, as well as Member States’ climate policy targets and 2005 base year emissions 
under the Effort Sharing Decision (for 2020) are measured in global warming potential (GWP) values from the 4th Assessment 
Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ climate policy targets and 2005 base 
year emissions under the Effort Sharing Regulation (for 2030) are in GWP values from the 5th Assessment Report (AR5). The 
table above shows the base year emissions 2005 under the Effort Sharing Decision, using AR4 GWP values. Emissions for 2017-
2021 are expressed in percentage change from 2005 base year emissions, with AR4 GWP values. 2021 data are preliminary. The 
table shows the 2030 target under Regulation (EU) 2023/857 that aligns it with the EU’s 55% objective, in percentage change 
from 2005 base year emissions (AR5 GWP). Distance to target is the gap between Member States’ 2030 target (with AR5 GWP 
values) and projected emissions with existing measures (WEM) and with additional measures (WAM) (with AR4 GWP values), in 
percentage change from the 2005 base year emissions. Due to the difference in global warming potential values, the distance to 
target is only illustrative. The measures included reflect the state of play as of 15 March 2021.  
(2) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2023 
greenhouse gas inventory submission. 2030 value of net greenhouse gas removals as in Regulation (EU) 2023/839 
amending Regulation (EU) 2018/841 (LULUCF Regulation) – Annex IIa, kilotons of CO2 equivalent, based on 2020 submissions. 
(3) Renewable energy and energy efficiency targets and national contributions are in line with the methodology established under 
Regulation (EU) 2018/1999 (Governance Regulation).  
(4) Percentage of total revenue from taxes and social contributions (excluding imputed social contributions). Revenue from the EU 
Emissions Trading System is included in environmental tax revenue.  
(5) Expenditure on gross fixed capital formation for the production of environmental protection services (abatement and 
prevention of pollution) covering government, industry, and specialised providers.  
(6) European Commission, Study on energy subsidies and other government interventions in the European Union, 2022 edition.  
(7) The climate protection gap refers to the share of non-insured economic losses caused by climate-related disasters. This 
indicator is based on modelling of the current risk from floods, wildfires and windstorms as well as earthquakes, and an 
estimation of the current insurance penetration rate. The indicator does not provide information on the split between the 
private/public costs of climate-related disasters. A score of 0 means no protection gap, while a score of 4 corresponds to a very 
high gap (EIOPA, 2022).  
(8) Sulphur oxides (SO2 equivalent), ammonia, particulates < 10 µm, nitrogen oxides in total economy (divided by GDP).  
(9) Battery electric vehicles (BEV) and fuel cell electric vehicles (FCEV). 

33 

2030200520172018201920202021target/valueWEMWAMGreenhouse gas emission reductions in effort sharing sectors (1)Mt CO2eq; %; pp43.5-25%-28%-27%-32%--50.0%-11-11Net carbon removals from LULUCF (2)kt CO2eq-43,385-38,790-35,451-38,256-41,287-41,711-47321n/an/a200520172018201920202021Share of energy from renewable sources in gross final consumption of energy (3)%40%53%54%56%60%63%65%Energy efficiency: primary energy consumption (3)Mtoe49.046.347.345.841.343.840.2Energy efficiency: final energy consumption (3)Mtoe33.232.131.931.530.531.729.7201620172018201920202021201920202021Environmental taxes (% of GDP)% of GDP2.22.12.12.12.01.92.42.22.2Environmental taxes (% of total taxation)(4)% of taxation 5.04.84.84.84.74.55.95.65.5Government expenditure on environmental protection% of total exp.0.91.01.01.01.01.11.71.61.6Investment in environmental protection (5) % of GDP0.40.40.50.5--0.40.40.4Fossil fuel subsidies (6)EUR2021bn1.71.41.31.00.8-53.050.0-Climate protection gap (7) score 1-40.00.81.5Net greenhouse gas emissions1990 = 10074.077.076.074.067.067.076.069.072.0Greenhouse gas emission intensity of the economykg/EUR'100.140.130.130.120.11-0.310.300.26Energy intensity of the economykgoe/EUR'100.110.110.110.110.10-0.110.11-Final energy consumption (FEC)2015=100101.4101.0100.499.296.099.7102.994.6-FEC in residential building sector2015=100103.3103.9101.199.496.9106.3101.3101.3106.8FEC in services building sector2015=100104.899.2102.5100.199.6105.8100.194.4100.7Smog-precursor emission intensity (to GDP) (8)tonne/EUR'100.550.510.460.420.39-0.930.86-Years of life lost due to air pollution by PM2.5per 100.000 inh.72.239.085.151.432.3-581.6544.5-Years of life lost due to air pollution by NO2per 100.000 inh.42.213.018.310.53.6-309.6218.8-Nitrates in ground watermg NO3/litre------21.020.8-Land protected areas% of total10.613.8-14.114.115.026.226.426.4Marine protected areas% of total15.3--15.5-14.910.7-12.1Organic farming% of total utilised agricultural area18.319.220.320.420.320.28.59.1-201720182019202020212022202020212022Share of zero-emission vehicles (9)% in new registrations1.12.04.49.619.129.05.48.910.7Number of AC/DC recharging points (AFIR categorisation)---154971998223869188626330028432518Share of electrified railways%75.375.375.175.175.175.156.6n/a56.6Hours of congestion per commuting driver per year21.621.822.022.0n/an/a28.7n/an/aMobility'Fit for 55'DistanceProgress to policy targetsNational contribution to 2030 EU targetSwedenEUFiscal and financialindicatorsEnergyPollutionBiodiversityClimate 
 
     
 
ANNEX 7: ENERGY SECURITY AND AFFORDABILITY 

Sweden  is  dependent  on  imports  for  fossil 
fuels but also before Russia invaded Ukraine, 
Sweden had limited exposure to Russian gas 
and  oil.  Sweden  does  not  depend  on  fossil 
fuels  for  the  electricity  sector.  This  Annex (50) 
sets out actions carried out by Sweden to achieve 
the  REPowerEU  objectives,  including  through  the 
implementation of its recovery and resilience plan, 
improve  energy  security  and 
in  order 
affordability  while  accelerating  the  clean  energy 
transition,  and  contributing  to  enhancing  the  EU’s 
competitiveness in the clean energy sector (51).  

to 

Graph A7.1: Underground storage levels in Sweden 

Sweden  fulfilled  its  gas  storage  obligations  last 
winter,  reaching  92,94%  by  1  November,  and 
ended  the  heating  season  with  a  filling  gas 
storage at 95,24% at 15 April 2023 (52). However, 
its  single  underground  storage  facility (53)  has  a 
low  total  capacity,  at  0.01  bcm,  corresponding  to 
less than one day of winter consumption to meet 
peak demand. Sweden operates two small floating 
LNG  regasification  terminals  with  a  capacity  of 
0.47  bcm/year  (Nynäshamn)  and  0.25  bcm/year 
(Lysekil).  These  are  not  connected 
the 
transmission  grid.  Recent  measures  and  the  high 
energy  prices  led  to  a  gas  demand  reduction  of 
about 37% over the period August 2022  – March 
2023  when  compared  to  the  previous  5-years 
average. 

to 

Graph A7.2: Share of gas consumption per sector, 
2021 

Source: JRC calculation based on AGSI+ Transparency 
Platform, 2022 (Last update 2 May 2023) 

Sweden  has  a  high  level  of  national  gas 
supply security, due to its secure gas supply 
from non-Russian providers and its relatively 
low  consumption.  In  2022,  most  of  its  gas 
consumption,  historically  around  1.55  billion  cubic 
including  off-grid  LNG,  was 
metres 
(bcm), 
imported  from  Denmark 
(53%),  followed  by 
Finland (13%) and Norway (9%). Full disruption of 
Russian  gas  would  likely  not  severely  affect  the 
Swedish gas system,. However, it is estimated that 
greater  indirect  dependence  on  Russian  exports 
existed  before  the  Russian  war  on  Ukraine,  as  a 
share  of  liquefied  natural  gas  imports  (LNG) 
transits  through  other  countries  while  originating 
from  Russia,  meaning  it  has  untraceable  origins. 

(50)  It is complemented by Annex 6 as the European Green Deal 
focuses on the clean energy transition, by Annex 8 on the 
actions taken to mitigate energy poverty and protect the 
most vulnerable ones, by Annex 9 as the transition to a 
circular economy will unlock significant energy and resource 
savings, further strengthening energy security and 
affordability, and by Annex 12 on industry and single market 
complementing ongoing efforts under the European Green 
Deal and REPowerEU. 

(51)  In line with the Green Deal Industrial Plan COM(2023) 62 
final, and the proposed Net-Zero Industry Act COM(2023) 
161 final 

Source: Eurostat 

The  security  of  supply  of  the  national  gas 
system  and  the  electricity  system  are  not 
interlinked,  as  Sweden  has  almost  no  gas-
powered  installed  electric  capacity.  Electricity 
security  does  not  depend  on  gas-fired  power 
plants, as with 42.6 GW installed electric capacity, 
Sweden depends on gas for only 1% of electricity 
generation  (see  Annex  6).  In  2021,  its  gross 
electricity  production  of  171  TWh  depended  on 
natural gas for only 0.16%. To mitigate the impact 
of  the  energy crisis, in  2021  Sweden put  in place 
energy  saving  measures  to  reduce  electricity  use 

(52)  Regulation of the European Parliament and of the Council 
amending Regulations (EU) 2017/1938 and (EC) No 
715/2009 with regard to gas storage and Implementing 
Regulation (EU) 2022/2301 of 23 November 2022 setting 
the filling trajectory with intermediary targets for 2023 for 
each Member State with underground gas storage facilities 
on its territory and directly interconnected to its market area. 

(53)  Sweden has one single underground storage facility, Skallen, 

managed by Swedgas. 

34 

15.9%67.2%1.2%11.5%3.7%0.4%EnergyIndustryTransportServices and public sectorHouseholdsAgriculture, forestry andfishery 
 
 
                                                 
      
                                                 
 
 
by  up  to  10%,  mainly  through  behavioural 
changes.  

Sweden  is  upgrading  its  grid  infrastructure, 
but further investments are necessary. Power 
and  grid  capacity  constraints,  especially  in  the 
south,  and  the  lack  of  transmission  capacity 
between the north and the south, have detrimental 
effects  on  energy  prices  and  economic  activity. 
Further  investments  in  grid  and  network  capacity 
are  needed  for  Sweden  to  reach  its  renewable 
energy  production  targets.  As  part  of  its  recovery 
resilience  plan,  Sweden  will  carry  out 
and 
investments to digitalise the grid in order to make 
it easier to integrate renewable energy sources. An 
increase 
cross-border 
interconnections  would  increase  its  energy  supply 
and  adaptability  to  regional  variations.  While 
Sweden  does  not  yet  have  political  goals  for 
offshore  renewable  capacity  towards  2040  and 
2050, the ongoing exercise by national authorities 
to  look  into  additional  areas  for  offshore  energy 
production  may  require  not  only  an  expansion  of 
the  maritime  space  allocated  to  it,  but  also  of 
hybrid interconnectors with neighboring countries. 

electricity 

in 

Graph A7.3: Gas consumption per industrial sector 
(% of total industry gas consumption) 

Source: Eurostat 

in 

particular 

introduced  by 
Despite  the  mechanisms 
Sweden  to  mitigate  soaring  energy  prices, 
households, 
low-income 
families,  and  industries,  are  being  severely 
hit. The share of gas used in dwellings is relatively 
low, the high energy prices are hitting households 
hard (see Annex 8). The surge in energy prices has 
had  a  considerable  impact  on  Swedish  industry, 
which  accounts  for  67.2%  of  gas  consumption. 
Sectors such as the chemical industry and iron and 
steel  are  particularly  exposed  to  energy  shocks 
and  are  experiencing  increasing  pressure  to  raise 

their  prices  to  safeguard  margins  or  to  reduce 
production.  Reducing  energy  consumption  by 
increasing energy efficiency is crucial for Sweden. 
It would contribute significantly to reducing energy 
costs for both consumers and businesses. 

Graph A7.4: Sweden´s retail energy prices for 
industry (top) and households (bottom) 

(1) For industry: the band consumption is ID for electricity and 
I4 for gas 
(2) For households, the band consumption for electricity is DC 
and D2 for gas 
Source: Eurostat 

Sweden  aims  to  further  decarbonise  its  energy 
system,  and  further  reforms  and  investments 
could help it seize the many opportunities it has to 
do  so. 
Its  deployment  of  renewable  energy 
reached a total of 38 GW in 2022, a 10% increase 
from  2021.  Most  of  this  growth  was  in  solar 
(+62%)  and  wind  energy  (+20%). (54)  This  came 
after  a  steady  growth  during  the  last  decade. 
However,  lengthy  authorisation  procedures  and 
grid constraints are hampering the rollout of faster 
renewable  generation  capacity.  Through 
its 
recovery  and  resilience  programme  and  the 
‘Climate  Leap’  and  ‘Industry  Leap’  programmes, 
Sweden  subsidises  local  and  regional  climate 
investments  and  supports  industrial  processes, 
especially the conversion to renewable energy for 
heating in industry and agriculture; the production 
of  biogas  and biofuels;  sustainable  transport;  and 
industry decarbonisation. Sweden is carrying out a 

(54)  IRENA, Renewable capacity statistics 2023. 

35 

0.0%10.0%20.0%30.0%40.0%50.0%60.0%Iron and steelChemical and petrochemicalNon-ferrous metalsNon-metallic mineralsTransport equipmentMachineryMining and quarryingFood, beverages and tobaccoPaper, pulp and printingWood and wood productsConstructionTextile and leather050100150200250€/MWhGas SwedenGas EUElectricity SwedenElectricity EU050100150200250300€/MWhGas SwedenGas EUElectricity SwedenElectricity EU 
     
       
                                                 
number  of  checks  on  products  covered  by  eco-
design  and  energy  labelling  that  may  be  too  low. 
This  generates  concerns  concerns  with  respect  to 
the  level  playing  field  among  economic  operators 
and uncertainty as to the compliance levels of the 
concerned products, and therefore possible missed 
energy and CO2 savings. (55) 

(55)  The internet-supported information and communication 
system for the pan-European market surveillance 

36 

 
                                                 
Table A7.1: Key energy indicators 

(1) The ranking of the main supliers is based on the latest available figures (for 2021) 
(2) FSRU included 
(3) Venture Capital investments include Venture Capital deals (all stages) and Private Equity Growth/Expansion deals (for 
companies that have previously been part of the portfolio of a VC investment firm). 
Source: Eurostat, Gas Infrastructure Europe (Storage and LNG Transparency Platform), JRC SETIS (2022), JRC elaboration based 
on PitchBook data (06/2022) 

37 

EU20182019202020212018201920202021Import Dependency [%] 29%30%32%21%58%61%57%56%of Solid fossil fuels 100%103%100%94%44%44%36%37%of Oil and petroleum products 91%107%118%72%95%97%97%92%of Natural Gas 100%100%100%100%83%90%84%83%Dependency from Russian Fossil Fuels [%]of Hard Coal22%18%26%31%40%44%49%47%of Crude Oil33%29%8%9%30%27%26%25%of Natural Gas 0%0%13%2%40%40%38%41%20152016201720182019202020212022Gross Electricity Production (GWh)162,112156,010164,250163,400168,439163,833171,798-Combustible Fuels13,90615,15015,54715,57116,39013,61816,137-Nuclear56,34863,10165,69668,54966,13049,19852,965-Hydro75,43962,13765,16862,25065,39372,44073,926-Wind16,32215,47917,60916,62319,84727,52627,244-Solar 971432304076791,0511,526-Geothermal 0000000-Other Sources0000000-Net Imports of Electricity (GWh)-22,600-11,735-18,992-17,223-26,161-24,997-25,568-   As a % of electricity available for final consumption -18%-9%-15%-13%-20%-20%-20% -Electricity Interconnection (%)--25.60%26.01%25.2%24.2%16.3%14.4%20152016201720182019202020212022Gas Consumption (in bcm)0.80.91.11.11.11.31.31.0Gas Imports - by type (in bcm)0.80.91.41.51.42.11.9-Gas imports - pipeline0.80.91.11.11.11.41.4-Gas imports - LNG0.00.00.30.30.30.70.5-Gas Imports - by main source supplier (in bcm) (1)Denmark0.80.90.80.80.80.80.8-Finland0.00.00.00.00.00.40.5-Netherlands0.00.00.10.20.10.20.2-Norway0.00.00.40.30.30.20.2-Others0.00.00.10.20.20.60.2-2019202020212022LNG TerminalsNumber of LNG Terminals (2)0000LNG Storage capacity (m3 LNG)0000Underground StorageNumber of storage facilities1111Operational Storage Capacity (bcm)0.010.010.010.012019202020212022VC investments in climate tech start-ups and scale-ups (EUR Mln) (3)1092.1783.22967.3n.a.as a % of total VC investments in Sweden36.7%23.7%39.5%n.a.Research & Innovation spending in Energy Union R&i priorites (2)Public R&I (EUR mln)162.0212.0245.7n.a.Public R&I (% GDP)0.034%0.044%0.046%n.a.Private R&I (EUR mln)898.8n.a.n.a.n.a.Private R&I (% GDP)0.19%n.a.n.a.n.a.SWEDENENERGY DEPENDENCEDIVERSIFICATION OF GAS SUPPLIESCLEAN ENERGYELECTRICITY 
 
     
 
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY 

in 

EU, 

line 

with 

This  Annex  monitors  Sweden’s  progress  in 
ensuring  a  fair  transition  towards  climate 
neutrality  and  environmental  sustainability, 
notably  for  workers  and  households 
in 
vulnerable situations. The number of jobs in the 
green economy has risen quickly. Sweden  has the 
highest  upskilling  rate  for  the  green  transition  in 
the 
Council 
the 
Recommendation (56)  which  supports 
the  fair 
transition,  and the  implementation  of  REPowerEU. 
Sweden’s  recovery  and  resilience  plan 
(RRP) 
promotes a sustainable and inclusive recovery, for 
instance  through  investment  to  decarbonise  the 
industrial sector and local and regional projects to 
(GHG)  emissions (57), 
reduce  greenhouse  gas 
complementing  the  territorial  just  transition  plans 
and action supported by the European Social Fund 
Plus  (ESF+).  The  plan  focuses  on  increasing  the 
number  of  places  in  higher  education  and  upper 
secondary vocational training institutions. 

industries 

energy-intensive 

Employment  in  Sweden’s  energy-intensive 
sectors  is  stable  overall,  the  green  economy 
is further expanding and the number of green 
jobs  is  growing.  The  greenhouse  gas  emissions 
intensity  of  Sweden’s  workforce  declined  from 
10.1 to 7.9 tonnes per worker between 2015 and 
2021,  below  the  EU  average  of  13.7  tonnes  (see 
in 
Graph A8.1  and  Table A8.1).  Employment 
Sweden’s 
(EII) 
represented  a  stable  share  of  2.8%  of  total 
(EU  average:  3.0%). 
employment 
Employment in mining and quarrying increased by 
12.5%  since  2015  (to  around  9 000  workers). 
Sweden  produces  90%  of  Europe’s  iron  ore,  and 
rare earth metals might play an increasing role in 
the  future (58).  However,  employment  in  other 
energy-intensive sectors such as manufacturing of 
basic  metals,  chemicals  and  motor  vehicles  has 
decreased  and  the  ban  on  coal,  oil  and  gas 
trend (59).  The 
extraction  might  further 
expansion  of  mining 
is 
reported  to  entail  social  conflicts  and  negatively 

in  Northern  Sweden 

in  2020 

this 

(56)  Council Recommendation of 16 June 2022 on ensuring a fair 
transition towards climate neutrality (2022/C 243/04) covers 
employment, skills, tax-benefit and social protection 
systems, essential services and housing.. 

(57)  See 2022 Country Report (Annex 6) and Annex 3 

(58)  Huge rare earth metals discovery in Arctic Sweden - BBC 

affect  natural  ecosystems (60).  Total  jobs  in  the 
environmental  goods  and  services  sector  grew 
strongly  by  23.9%  (to  149 695)  during  2015-19 
(EU:  +8.3%),  reaching  3%  of  total  employment, 
above the EU average (2.2%). The job vacancy rate 
in construction, which is a key sector for the green 
transition, is relatively low, at 2.4% vs 4.0% in the 
EU  in  2022 (61).  The  Swedish  Green  jobs  initiative 
launched  in  2020  offered  unemployed  people 
training  in  occupations  in  the  green  industries 
where there were shortages. 

Graph A8.1: Fair transition challenges in Sweden 

Source: Eurostat, EMPL-JRC GD-AMEDI/AMEDI+ projects and 
World Inequality Database (see Table A8.1). 

recent 

increase 

significant 

importance  for  both  preserving 

Sweden is strong on upskilling and reskilling 
in declining and transforming sectors, thanks 
to  a 
in 
participation in learning activities. Skills are of 
jobs  in 
core 
transforming  sectors  and  for  smooth 
labour 
market  transitions.  In  energy-intensive  industries, 
workers’  participation  in  education  and  training 
increased from 23% in 2015 to 29.8% in 2022  – 
the  highest  rate  in  the  EU  (average:  10.4%  in 
2022).  In  Sweden,  only  14%  of  citizens  believe 
that  they  do  not  have  the  necessary  skills  to 
contribute to the green transition (EU: 38%) (62). In 
this  context, 
the  Just  Transition  Mechanism 
supports  action  linked  to  the  climate  transition  in 
the steel industry in Norrbotten County and in the 
metal  industry  in  Västerbotten  County,  while  the 
ESF+  supports  the  upskilling  and  reskilling  of 
workers  in  the  whole  of  Sweden.  1.4%  of  ESF+ 
funding  (EUR  9.8  million)  is  specifically  set  aside 

(60)  Kløcker et al. 2022, Impact of mining on traditional livelihoods 
of Sami people and lands: UN advisers urge Sweden to stop 
mine in home of indigenous Sami | Reuters 

News 

(61)  Eurostat (JVS_A_RATE_R2) 

(59)  Ban on oil, coal and gas exploration (July 2022)- riksdagen.se 

(62)  Special Eurobarometer 527. 

38 

00.511.522.53GHG per workerEmployment EIIEducation &training EIIEnergy povertyTransportpoverty(proxy)CarboninequalityEU LatestSE Latest (vs EU Latest)SE 2015 (vs EU Latest) 
 
                                                 
  
                                                 
 
for  contributing  to  skills  and  jobs  in  the  green 
economy.  The  RRP  also  includes  a  measure  to 
improve 
for  providing  vocational 
incentives 
training at local level. 

Graph A8.2: Distributional impacts of energy prices 
due to rising energy expenditure (2021-2023) 

Mean change of energy expenditure as a percentage (%) of 
total expenditure per income decile (D) due to observed price 
changes (August 2021 – January 2023 relative to the 18 
months prior) excl. policy support measures and behavioural 
responses. 
Source: EMPL-JRC GD-AMEDI/AMEDI+ projects, based on 
Household Budget Survey 2015 and Eurostat inflation data 
for CP0451 and CP0452. 

indicators  fluctuated 

Energy  poverty 
in 
recent  years,  with  the  poorest  households 
most  affected,  even  before  the  spike  in 
energy  prices  –  although  at  a  lower  scale 
than  the  EU  average.  The  share  of  the 
population  unable  to  keep  their  home  adequately 
warm  increased  from  1.2%  in  2015  to  1.7%  in 
2021 (63).  In  particular,  3.3%  of  the  population  at 
risk of poverty (AROP) were affected in 2021 (EU: 
16.4%  in  2021),  as  were  1.7%  of  lower  middle-
income  households  (in  deciles  4-5)  in  2021  (EU: 
8.2%  in  2021).  Before  the  energy  price  hikes,  an 
estimated  14.5%  of  the  total  population  and 
(expenditure-based)  at-risk-of-
26.0%  of 
poverty 
residential 
expenditure on electricity, gas, and other fuels (64) 
above  10%  of  their  household budget (still  below 
the  estimated  EU  averages  of  26.9%  and  48.2%, 
respectively).  Sweden  explicitly  stated  in  its  long-
term renovation strategy that it does not consider 
any  distinction  between  “energy  poverty”  and 

(AROP)  population  had 

the 

(63)  Energy poverty is a multi-dimensional concept. The indicator 
used focuses on an outcome of energy poverty. Further 
indicators are available at the Energy Poverty Advisory Hub. 

(64)  Products defined according to the European Classification 
of Individual Consumption according to Purpose (ECOICOP): 
CP045. 

39 

poverty,  broadly  defined.  Consequently,  there  are 
in  place  specifically  addressing 
no  measures 
energy poverty (65). 

the 

The  increased  energy  prices  in  2021-2023 
are  negatively  affecting  household  budgets, 
but  slightly  less  than  in  the  EU  overall.  As  a 
result of price changes during the August 2021 to 
January  2023  period  relative  to  the  18  months 
prior (cf. Annex 7), in the absence of policy support 
and  behavioural 
share  of 
responses, 
individuals living in households which spend more 
than  10%  of  their  budget  on  energy  would  have 
increased  by  11.0  percentage  points (pps)  for  the 
whole  population  and  by  6.1  pps  among  the 
(expenditure-based)  AROP  population,  less  than 
the  EU-level  increases  (16.4  pps  and  19.1  pps, 
respectively) (66).  Expenditure  shares  of  low  and 
lower-middle income groups would have increased 
the most for electricity, as shown in Graph A8.2. By 
contrast,  transport  fuel  price  increases  in  Sweden 
affect  the  lower-middle  as  well  as  the  (upper) 
middle class. Among the (expenditure-based) AROP 
population,  individuals  living  in  households  with 
budget shares for private transport fuels (67) would 
have  increased  by  3.4  pps  due  to  the  increase  in 
transport  fuel  prices,    less  than  the  EU  average 
increase (5.3 pps), yet standing slightly above the 
EU average in January 2023 (43.0% vs 37.9%).  

Access to public transport displays an urban-
rural  divide  especially  for  remote  rural 
areas.  Citizens  perceive  public  transport  to  be 
available  (70%  vs  55%  in  the  EU),  affordable 
(59% vs 54%) and of good quality (70% vs 60%). 
55%  say  that  more  affordable  transport  would 
help  them  to  make  the  switch  to  sustainable 
transport  modes.  As  regards  these  perceptions, 
rural  areas  in  Sweden  perform  worse  than  urban 
areas,  yet  still  better  than  the  EU  average (68), 
while remote rural areas lie below the EU average. 
The  average  carbon  footprint  of  the  top  10%  of 
emitters among the population in Sweden is about 
4.5 times higher than that of the bottom 50% (see 
Graph  A8.1),  slightly  below  the  EU  average  (5.0 
times). 

(65)  Assessment of the first long-term renovation strategies 

under the Energy Performance of Building Directive (Art. 2a) - 
Publications Office of the EU (europa.eu) 

(66)  EMPL-JRC GD-AMEDI/AMEDI+ ; see details in the related 

technical brief.   

(67)  ECOICOP: CP0722. 

(68)  EU (rural): 46%, 48% and 56% respectively. Special 

Eurobarometer 527. 

0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%ElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasD1D2D3D4D5D6D7D8D9D10SE GasSE ElectricityEU GasEU Electricity 
   
                                                 
                                                 
Table A8.1: Key indicators for a fair transition in Sweden 

Source: Eurostat (env_ac_ainah_r2, nama_10_a64_e, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-
JRC GD-AMEDI/AMEDI+ projects and World Inequality Database (WID). 

. 

40 

IndicatorDescriptionSE 2015SE LatestEU LatestGHG per workerGreenhouse gas emissions per worker - CO2 equivalent tonnes10.17.9 (2021)13.7 (2021)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24), automotive (C29) - %2.82.8 (2020)3 (2020)Education & training EIIAdult participation in education and training (last 4 weeks) in energy-intensive industries - %2329.8 (2022)10.4 (2022)Energy povertyShare of the total population living in a household unable to keep its home adequately warm - %1.21.7 (2021)6.9 (2021)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport - %39.643 (2023)37.1 (2023)Carbon inequalityAverage emissions per capita of top 10% of emitters vs bottom 50% of emitters5.25.1 (2020)5 (2020) 
 
 
  
 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

The  circular  economy  transition  is  key  to 
climate  and 
delivering  on 
the  EU’s 
environmental  goals  and  provides 
large 
socio-economic  benefits. It  spurs  job  growth, 
innovation  and  competitiveness  and 
fosters 
resilience  and  resource  security.  The  circularity 
transition  of  industry,  the  built  environment  and 
agri-food  can  generate  significant  environmental 
improvements (see Annex 6), as they rank among 
the most resource-intensive systems. 

Sweden’s  circular  economy  transition 
is 
insufficient  and  needs  accelerating  to  meet 
the  EU’s  circular  economy  goals.  The  EU’s 
2020 circular economy action plan (CEAP) aims at 
doubling  circular  material  use  by  2030  vs  2020. 
Sweden’s  use  of  circular  material  has  stagnated 
over recent years (6.8% in 2016 vs 6.6% in 2021) 
and  is  well  below  the  EU  average  of  11.7%.  The 
CEAP  also  aims  to  significantly  decrease  the  EU’s 
material  footprint.  In  2020,  Sweden’s  material 
footprint  (24.9  tonnes  per  head)  was  well  above 
the 2020 EU average (13.7 tonnes per head). The 
labour  market  benefits  of  the  circular  transition 
remain  limited  and  have  hardly  evolved  since 
2016. 

Sweden  recently  adopted  new  policies  to 
address  circular  economy  challenges,  but 
more measures are needed. In November 2020, 
Sweden  adopted  its  ‘Circular  economy  –  strategy 
for  the  transition  in  Sweden’  that  is  expected  to 
contribute  to  the  environmental  and  climate 
objectives, as well as the sustainable development 
goals  in  the  2030  Agenda.  In  January  2021,  the 
country adopted a new action plan as a follow-up 
to  the  2020  strategy.  The  action  plan  presents 
more  than  100  different  measures  along  the 
entire lifecycle of products, but it lacks a concrete 
timeline  for  implementing  each  deliverable.  The 
sectors  identified  as  priorities  include  plastics, 
textiles,  renewable  and  bio-based  material,  food, 
the  construction  and  property  sector  (including 
building  and  demolition  waste),  and  innovation-
critical materials and minerals. 

Sweden’s  waste  management  performance 
needs  improving  to  meet  EU  targets.  While 
hardly any municipal waste is directed to landfills 
(landfill  rate  is  <1%  in  2021),  a  majority  of  it  is 
treated  in  incineration  plants,  implying  a  strong 
reliance on this technique. The rate of incineration 
was  about  twice  the  EU  average  in  2019  and 

nearly  60%  in  2021.  Sweden  is  at  risk  of  not 
meeting  the  2025  recycling  target  for  municipal 
waste (i.e. 55%), since its current performance lies 
at 39.5% (2021 Eurostat data).  Sweden will need 
to  make  further  efforts  to  meet  the  more 
ambitious  recycling  targets  for  the  period  up  to 
2035 through improvements in separate collection 
and treatment of waste with a view to recycling. 

There is potential for the industrial system in 
Sweden to be more circular and efficient.   

Graph A9.1: Trend in material use 

Source: Eurostat 

Graph A9.2: Treatment of municipal waste 

Source: Eurostat 

41 

0.020.040.060.080.0100.0120.0140.0160.0180.00.05.010.015.020.025.030.0201620172018201920202021kg/capitatonnes/capitaMaterial footprint Sweden (tonnes/capita)Material footprint EU-27 (tonnes/capita)Trade in recyclable raw materials Sweden (imports extra EU, kg/capita)Trade in recyclable raw materials EU-27 (imports extra EU, kg/capita)4474524344494314180100200300400500600201620172018201920202021Kg per capita Difference waste generated/treatmentLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-27 
 
 
          
 
     
 
 
The economy, particularly industry, is less efficient 
at using materials to produce wealth than the EU 
average,  with  a  resource  productivity  of  1.6 
purchasing power standard per kilogramme vs 2.3 
for  the  EU.  Resource  productivity  has  stagnated 
since  2016,  indicating  significant  potential  to 
boost  repair,  reuse  and  use  of  secondary  raw 
materials. On the other hand, the 2022 edition of 
the  ‘Flash  Eurobarometer  on  small  and  medium 
enterprises  (SMEs),  resource  efficiency  and  green 
markets’ reveals that Swedish SMEs have already 
undertaken  substantive  measures  to  transition 
their  business  operations  towards  environmental 
sustainability.  They  perform  well  above  the  EU 
average  in  terms  of  actions  undertaken  (e.g. 
minimising  waste,  saving  energy,  water  and 
materials) to improve their resource efficiency. 

The  built  environment  system  has  scope  to 
reduce  the  depletion  of  resources.  The 
recovery rate of construction and demolition waste 
has  increased  since  2016  but  remains  below  the 
EU  average  (74%  vs  89%).  On  the  positive  side, 
Sweden  has  included  requirements  on  whole  life 
carbon  in  its  building  regulations.  This  provides 
incentives for both material and energy efficiency, 
as  developers  are  required  to  calculate  whole  life 
carbon  emissions  and  to  gradually  reduce  them. 
Sweden  requires  the  developer  to  prepare  and 
submit  a  climate  declaration  for  the  construction 
of  new  buildings 
from  1  January  2022. 
Additionally,  Sweden  has developed  and  launched 

a public generic climate database. There are plans 
to  introduce  limit  values  for  climate  emissions 
from buildings before 2027. 

to 

As  for  the  agri-food  system,  there 
is 
composting  and 
increase 
potential 
digestion.  Sweden’s  composting  and  anaerobic 
digestion per head has increased moderately since 
2016 but remained below the EU average in 2020 
at 82 kg per head vs 100 kg, which was also not in 
line with best practice. Sweden should step up  its 
efforts  to  increase  composting  and  anaerobic 
digestion  to  make  its  circular  economy  more 
efficient  and  enhance  its  strategic  autonomy  by 
generating biomethane. 

There  remains  a  financing  gap  in  circular 
economy, 
including  waste  management.  
Additional investments will be required to address 
growing  needs.  The  financing  gap  was  estimated 
at  EUR  779  million  per  year  between  2014  and 
2020.  Over  this  period,  investment  needs  were 
estimated  to  be  at  least  EUR  2.1  billion  per  year 
while  investment  baselines  were  EUR  1.3  billion 
per  year  (see  Annex  6).  Investment  in  areas  such 
as  eco-design,  repair,  reuse  and  remanufacturing 
as well as the uptake of new business models will 
be  necessary  to  reach  the  EU’s  circular  economy 
objectives. Additional investments are necessary in 
improving separate waste collection and treatment 
infrastructure to divert waste from incineration. 

Table A9.1: Overall and systemic indicators on circularity 

(1) Persons employed in the circular economy only tracks direct jobs in selected sub-sectors of NACE codes E, C, G and S; (2) the 
circular material use rate measures the share of material recovered and fed back into the economy in overall material use; (3) the 
recovery rate of construction and demolition waste includes waste which is prepared for reuse, recycled or subject to material 
recovery, including through backfilling operations; (4) soil sealing: 2016 column refers to 2015 data; (5) food waste includes 
primary production, processing and manufacturing, retail and distribution, restaurants and food services, and households.  
Source: Eurostat, European Environment Agency 

42 

AREA201620172018201920202021EU27 Latest year EU 27Overall state of the circular economyMaterial footprint (tonnes/capita)25.324.025.826.424.9-13.72020YoY growth in persons employed in the circular economy (%)1-0.6 0.6-5.0 -0.7 --2.92019Water exploitation index plus (WEI+) (%)1.10.71.00.2--3.62019IndustryResource productivity (purchasing power standard (PPS) per kilogram)1.51.51.51.51.51.62.32021Circular material use rate (%)26.86.76.66.56.86.611.72021Recycling rate (% of municipal waste)48.446.845.846.638.339.549.62021Built environmentRecovery rate from construction and demolition waste (%)361.0-90.0-74.0-89.02020Soil sealing index (base year = 2006)4103.4-112.3---108.32018Agri-foodFood waste (kg per capita)5----87.0-131.02020Composting and digestion (kg per capita)72.070.069.064.078.082.0100.02021 
 
          
 
ANNEX 10: DIGITAL TRANSFORMATION 

transformation  by  2030, 

Digital  transformation  is  key  to  ensuring  a 
resilient and competitive economy. In line with 
the  Digital  Decade  Policy  Programme,  and  in 
particular  with  the  targets  in  that  Programme  for 
digital 
this  Annex 
describes  Sweden’s  performance  on  digital  skills, 
digital 
the 
digitalisation  of  businesses  and  public  services. 
Where relevant, it makes reference to progress on 
implementing  the  Recovery  and  Resilience  Plan 
(RRP).  Sweden  allocates  20%  of  its  total  RRP 
budget to digital (EUR 0.7 billion) (69). 

infrastructure/connectivity 

and 

The  Digital  Decade  Policy  Programme  sets 
out a pathway for Europe’s successful digital 
transformation  by  2030.  The  Programme 
provides  a  framework  for  assessing  the  EU’s  and 
Member States’ digital transformation, notably via 
the  Digital  Economy  and  Society  Index  (DESI).  It 
also  provides  a  way  for  the  EU  and  its  Member 
States  to  work  together,  including  via  multi-
country  projects,  to  accelerate  progress  towards 
the  Digital  Decade  digital  targets  and  general 
objectives (70).  More  generally,  several  aspects  of 
digital  transformation  are  particularly  relevant  in 
the current context. In 2023, the European Year of 
Skills, building the appropriate skillset to make full 
use of the opportunities that digital transformation 
offers  is  a  priority.  A  digitally  skilled  population 
increases the development and adoption of digital 
technologies  and  leads  to  productivity  gains (71). 
Digital  technologies,  infrastructure  and  tools  all 
play  a  role  in  the  fundamental  transformation 
needed to adapt the energy system to the current 
structural challenges (72). 

Sweden  is  one  of  the  top  performers  in 
digital  skills.  The  country  performs  well  above 
the  EU  average  for  basic  and  advanced  digital 
skills. To ensure that there is no shortage of skilled 

(69)  The share of financial allocations that contribute to digital 
objectives has been calculated using Annex VII of the RRF 
Regulation. 

(70)  The Digital Decade targets as measured by DESI indicators 
and complementary data sources are integrated to the 
extent currently available and/or considered particularly 
relevant in the MS-specific context.  

(71)  See for example OECD (2019): OECD Economic Outlook, 

Digitalisation and productivity: A story of complementarities, 
OECD Economic Outlook, Volume 2019 Issue 1 | OECD 
iLibrary (oecd-ilibrary.org). 

(72)  The need and possible actions for a digitalisation of the 
energy system are laid out in the Communication 
‘Digitalisation the energy system – EU action plan’ 
(COM(2022)552. 

digital workers, Sweden considers digital skills as a 
central  component  of  all  relevant  strategies  and 
measures (including for higher level education and 
vocational  training).  Furthermore,  Sweden’s  RRP 
contains  investment  measures  that  are  expected 
increase  the  number  of  study  places  at 
to 
universities and other higher education institutions, 
including in higher vocational education in relevant 
fields. 

on 

high 

scores 

Sweden 
digital 
infrastructure/connectivity. Sweden's very high 
capacity  network  (VHCN)  coverage  is  well  above 
the  EU  average  and  the  Government  announced 
already  in  its  broadband  plan (73)  that  it  aims  to 
cover the entire country with access to high-speed 
connectivity, mainly using fibre. In areas where the 
costs  of  deploying  fibre  are  prohibitive  (affecting 
2%  of  the  population)  mobile  technologies  are 
being  assessed.  Moreover,  as  part  of  its  RRP, 
in  fixed  high-speed 
Sweden  aims  to 
broadband networks in areas where access would 
not  be  provided  on  commercial  basis  alone. 
Regarding  5G  coverage,  however,  Sweden 
is 
increasingly  lagging  behind  the  EU  average  both 
on overall 5G coverage and on 5G coverage on the 
3.4-3.8  GHz  spectrum  band  which  is  essential  for 
enabling  advanced  applications  requiring  large 
spectrum bandwidth. An increased use of relevant 
frequency  bands  is  expected  to  help  the  country 
catch up with the EU average in this regard. 

invest 

in 

forerunner 

is  an  EU 

the 
Sweden 
digitalisation of businesses. The country scores 
well above the EU average for SMEs with at least 
a  basic  level  of  digital  skills  and  the  companies’ 
use  of  advanced 
cloud 
computing.  There  are  new  or  recent  strategies  on 
artificial  intelligence and the provision and use of 
data.  Sweden  often  involves  academia  and  the 
private  sector  in  joint  partnerships  to  ensure  the 
rapid transfer of knowledge and technology to the 
market.  

technologies 

like 

Sweden  performs  well  on  the  digitalisation 
of  public  services,  but  its  decentralised 
model  of  governance  leaves  some  room  to 

(73) Source: Government Offices of Sweden, A Completely 
Connected Sweden by 2025 – a Broadband Strategy 
(https://www.government.se/496173/contentassets/afe9f1cf
eaac4e39abcdd3b82d9bee5d/sweden-completely-
connected-by-2025-
eng.pdf￼)https://www.government.se/496173/contentasset
s/afe9f1cfeaac4e39abcdd3b82d9bee5d/sweden-
completely-connected-by-2025-eng.pdf 

43 

 
 
                                                 
                                                 
 
to 

and 

specifications 

improve coordination. The country scores above 
the EU average in digital public services for people 
and  businesses,  but  interoperability  and  data 
exchange  between  different  authorities  could  be 
improved. This is the task of the Agency for Digital 
Government (DIGG), which acts as a central hub in 
this  area.  The  government  has  commissioned  a 
new  investigation  to  suggest  a  new  national  law 
for interoperability in the Swedish public sector. (74) 
The  intention  is  to  give  DIGG  a  right  to  prescribe 
standards 
secure 
interoperability  in  the  whole  public  sector.  The 
investigation shall report a legislative proposal by 
the  end  of  December  2023.  With  the  aim  of 
standardising solutions for citizens and businesses 
across  the  public  administration,  Sweden’s  RRP 
investments  to  develop  new  digital 
includes 
services  and  to  upgrade  and  modernise  existing 
services.  Sweden  currently  has  three  eID  means 
notified  under 
(Svensk 
elegitimation) scheme. BankID, Freja eID, and EFOS 
are notified at the levels of assurance ‘substantial’ 
and 
is  good,  not  all 
categories of the population can apply for an eID. 
All eID schemes offer the possibility of interacting 
with public organisations via a smart device.  

‘high’.  Whilst  progress 

the  Swedish  eID 

(74)  I 2022: 03 Utredningen om interoperabilitet vid datadelning. 

44 

 
                                                 
Table A10.1: Key Digital Decade targets monitored by DESI indicators 

(1) The 20 million target represents about 10% of total employment. 
(2) The Fibre to the Premises coverage indicator is included separately as its evaluation will also be monitored separately and 
taken into consideration when interpreting VHCN coverage data in the Digital Decade. 
(3) At least 75 % of Union enterprises have taken up one or more of the following, in line with their business operations: (i) cloud 
computing services; (ii) big data; (iii) artificial intelligence.   

Source: Digital Economy and Society Index 

45 

EUDigital Decade target by 2030 DESI 2021DESI 2022DESI 2023DESI 2023(EU)Digital skillsAt least basic digital skillsNA67%67%54%80%% individuals2021202120212030ICT specialists (1)7.5%8.0%8.0%4.5%20 million% individuals in employment aged 15-7420202021202120212030Digital infrastructure/connectivityFixed Very High Capacity Network (VHCN) coverage81%83%85%73%100%% households20202021202220222030Fibre to the Premises (FTTP) coverage (2)80%82%84%56%-% households20202021202220222030Overall 5G coverage14%18%20%81%100%% populated areas202020212022202220305G coverage on the 3.4-3.8 GHz spectrum bandNANA10%41%-% populated areas202220222030Digitalisation of businessesSMEs with at least a basic level of digital intensityNANA87%69%90%% SMEs202220222030Big data (3)19%19%19%14%75%% enterprises20202020202020202030Cloud (3)NA69%69%34%75%% enterprises2021202120212030Artificial Intelligence (3)NA10%10%8%75%% enterprises2021202120212030Digitalisation of public servicesDigital public services for citizensNA858877100Score (0 to 100)2021202220222030Digital public services for businessesNA888884100Score (0 to 100)2021202220222030Access to e-health recordsNANA7071100Score (0 to 100)202320232030Sweden 
 
 
  
 
 
 
 
 
 
ANNEX 11: INNOVATION 

This  Annex  provides  a  general  overview  of  the 
performance of Sweden’s research and innovation 
system,  which  is  essential  for  delivering  the  twin 
green and digital transition. 

in  particular  projects 

sector, 
that  develop, 
demonstrate  and  implement  new  technology  with 
zero, low or negative greenhouse gas emissions in 
industries with high process emissions. 

Sweden  has  been  an  ‘innovation  leader’  for 
many years. According to the 2022 edition of the 
European Innovation Scoreboard (75), the country’s 
overall performance is 135.7% of the EU average. 
Furthermore, it is increasing (by 10.5% from 2015 
to 2022)  at  a  higher  rate  than  the  EU’s  (9.9%), 
which means Sweden's performance lead over the 
EU average is widening. 

Sweden  has  the  highest  R&D  intensity (76)  in 
the  EU  (3.35%  of  GDP  in  2021) (77)  and  it  is 
among  the  top  performers  in  terms  of  business 
investment  in  R&D  (2.41%  of  GDP  in  2021)  and 
public  R&D 
in 
2021). (78) However, compared to 2020, there is a 
slight decrease in all three indicators. 

(0.94%  of  GDP 

investment 

Graph A11.1: R&D intensity (Gross domestic 
expenditure on R&D as % of GDP) 2010-2021 

systems 

research 

attractive 

Sustaining  a  high-quality  public  research 
base  and  a  sufficient  pool  of  talent  is 
essential  to  keep  the  Swedish  knowledge 
economy competitive. The country benefits from 
an  innovation-friendly  environment,  highly  skilled 
workers, 
and 
internationally  competitive  and  innovative  large 
companies.  Despite  these  strengths  and  although 
Sweden is a leading country in the EU in terms of 
researchers  and  scientific  publications  in  relation 
to  population  size, 
there  has  not  been  a 
corresponding increase in scientific impact (79), and 
the  number  of  new  doctoral  graduates  has  fallen 
sharply since 2015. (80) A shortage of highly skilled 
staff in science, technology and engineering might 
hamper  future  investment  in  R&D  in  Sweden.  In 
Sweden’s  most  R&D-intensive  companies,  the 
availability  of  skilled  staff  is  a  key  factor  in 
decisions  on  where  to  invest  in  R&D.  More  than 
52%  of  companies  consider  it  difficult  to  recruit 
R&D  staff,  and  more  than  54%  of  companies 
consider it more difficult to recruit R&D staff than 
5 years  ago (81)  The  number  of  new  graduates  in 
science  &  engineering  per  thousand  population 
aged  25-34  has  also  decreased  over  the  last 
10 years,  although  a  slightly  positive  trend  has 
been noticed since 2019. (82) 

Source: Eurostat, 2022 

The  Swedish  recovery  and  resilience  plan 
(RRP)  features  a  EUR 286 million  research 
and  innovation  investment  to  support  the 
green transition. This accounts for around 8.7% 
of  the  overall  expenditure  under  the  RRP.  A 
particular  focus 
is  on  support  for  climate 
investment  to  help  decarbonise  the  industrial 

(75)  2022 European Innovation Scoreboard, Country profile: 

Sweden https://ec.europa.eu/assets/rtd/eis/2022/ec_rtd_eis-
country-profile-se.pdf The EIS provides a comparative 
analysis of innovation performance in EU countries, including 
the relative strengths and weaknesses of their national 
innovation systems (also compared to the EU average). 

(76)  Defined as gross domestic expenditure on R&D as a 

percentage of GDP. 

(77)  European benchmark target for R&D intensity: 3%. 

(79)  Swedish Research Barometer, p. 59-64, 

https://www.vr.se/english/analysis/reports/our-reports/2022-
01-25-the-swedish-research-barometer-2021and 
https://ec.europa.eu/research-and-
innovation/en/statistics/performance-indicators/european-
innovation-scoreboard/eis#. 

(80)  New doctoral graduates per 1 000 population aged 25-34, 

https://ec.europa.eu/research-and-
innovation/en/statistics/performance-indicators/european-
innovation-scoreboard/eis. 

(81)  Royal Swedish Academy of Engineering Sciences, 
https://www.iva.se/projekt/naringslivets-fou-
investeringar/fou-barometern-2022/. 

(78)  Source: Eurostat. 

(82)  European Innovation Scoreboard 2022 

46 

1.522.533.520102015201620172018201920202021as % of GDPEUSE 
 
   
 
                                                 
                                                 
 
Table A11.1: Key innovation indicators 

(1) EU average for the latest available year or the year with the highest number of country data. 
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical database), Invest Europe 

47 

R&D intensity (GERD as % of GDP)3,173,223,393,493,352,26Public expenditure on R&D as % of GDP0,990,970,950,960,940,76Business enterprise expenditure on R&D (BERD) as % of GDP2,182,242,432,522,411,49Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 12,613,112,6::9,8Patent Cooperation Treaty (PCT) patent applications per billion GDP (in PPS)9,59,39::3,3Public-private scientific co-publications as % of total publications10,510,511,711,111,17,1Public expenditure on R&D financed by business enterprise (national) as % of GDP:0,0390,031::0.054New graduates in science & engineering per thousand pop. aged 25-3414,313,912,412,9:16Total public sector support for BERD as % of GDP::0,122::0,194R&D tax incentives: foregone revenues as % of GDP00,0120,015::0,1Share of environment-related patents in total patent applications filed under PCT (%)13,712,512,6: :13,3Venture capital (market statistics) as % of GDP0,0870,0530,0730,0980,1260,074Employment in fast-growing enterprises in 50% most innovative sectors6,55,56,5::5,5EU average (1)Finance for innovation and economic renewalKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation 2021Sweden2010201520192020 
 
 
 
 
 
 
 
  
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

in 

Productivity in Sweden is high, but skills and 
labour  shortages,  combined  with  the  soaring 
energy  costs  pose  new  challenges  for  firms’ 
competitiveness.  While  Sweden’s  strong 
ICT 
sector  and  leading  performance  in  innovation 
helps  drive  high  productivity 
services, 
productivity  is  uneven  across  sectors  such  as 
construction, where structural weaknesses, such as 
hinder 
obstacles 
productivity 
Sweden’s 
productivity  in  industry  declined  (-0.5%  year  on 
year)  while  the  EU  average  grew  (1.4%  year  on 
year). In addition, labour shortages in industry may 
become  an  increasingly  constraining  factor  in 
realising  planned 
investment  to  support  the 
transition  to  a  greener,  increasingly  digitalised 
economy and further boost Sweden’s productivity.  

affordability 
2022, 

housing 

growth. 

to 

In 

Swedish  industry  is  increasingly  affected  by 
labour  shortages. 
In  2022,  18%  of  firms 
reported  facing  such  constraints  (compared  to 
28% for the EU average), however, this figure has 
more than doubled for Sweden compared to 2021 
and  has  been  on  a  steep  increasing  trend  since 
2020  where  it  was  only  3%.  Reports  from  the 
Swedish  Agency  for  Growth  Policy  Analysis  have 
stressed  the  role  of  human  capital 
in  the 
development  of  labour  productivity  in  knowledge-
intensive 
the 
importance  for  Sweden  to  tackle  skills  shortages 
to further improve its productivity.  

industries (83), 

highlighting 

Containing  production  costs 
is  key  to 
preserving  the  competitiveness  of  Swedish 
industry.  According  to  Statistics  Sweden,  the 
annual rate of the Producer Price Index was 19.5% 
in  November.  Compared  with  November  2021, 
prices 
rose  by  50.5%  on  energy-related 
products (84).  Small  businesses,  which  are 
particularly  vulnerable  to  the  increase  in  energy 
prices, are confronted with an additional challenge 
and  uncertainty  as  the  Swedish  Government’s 
proposal  on  electricity  subsidies  for  companies  is 
facing  a  slow  roll  out  and  proving  to  be  an 
administrative challenge, notably due to mounting 
administrative costs.  

Graph A12.1: Labour productivity by sector 

Source: European Commission calculations based on AMECO 

study 

conducted  by 

Industry  in  Sweden  is  increasingly  suffering 
from the disruptions in supply chains. In 2022, 
55% of Swedish firms faced  constraints linked to 
materials  shortages,  above  the  EU  average  of 
47%.  This  share  has  been  soaring  since  2020, 
when it was 10% only, and has more than doubled 
since  2021.  A 
the 
Confederation  of  Swedish  Enterprise  showed  that 
in 2022, 77% of companies surveyed experienced 
difficulties  in  importing  goods  and  services.  62% 
experienced  problems  with  prices  going  up  and 
in  deliveries (85).  These 
60%  with  delays 
constraints heavily impact industries which have a 
high share of materials inputs such as automotive, 
aerospace,  defence  and  consumer  goods.  Such 
constraints are mainly due to disruptions in global 
logistics  and  disrupted  or  reduced  access  to  raw 
inputs. (86)  Regarding 
materials,  services  and 
critical 
import 
concentration  index  is  equal  to  the  EU  average 
with an index of 0.18. 

raw  materials, 

Sweden’s 

Sweden  proposes  a  conducive  business 
environment  for  firms  and  entrepreneurs.  In 
the  2022  IMD  World  Competitiveness  Ranking, 
Sweden  ranks  in  4th  place  (losing  2  places 
compared to 2021). Sweden’s high position in the 
ranking  is  secured  by  its  very  good  business 
efficiency  and 
Its  economic 
infrastructure. 
performance  is  lower,  however,  notably  due  to 
youth  unemployment  and  shortages  of  skilled 

(83)  Swedish Agency for Growth Policy Analysis – Productivity 

(85)  https://www.svensktnaringsliv.se/english/supply-chain-

Growth and its driving forces, 2021 

instability-worries-businesses_1191449.html 

(84)  Statistics Sweden 

(86)  EIB Investment Survey 2022 

48 

6080100120140160030507091113151719212003=100Market services (G_N)Manufacturing (C)Construction (F)Tradable (A_E, G_J)Non tradable (F, K_U) 
 
 
                                                 
   
                                                 
 
 
Sweden 

very  well 

labour. 
on 
performs 
digitalisation.  In  the  2022  Digital  Economy  and 
Society  Index  (DESI),  Sweden  ranks  4th  overall. 
Sweden’s  human  capital  is  one  of  its  strongest 
competitive  advantages  compared  to  the  other 
Member  States  (ranking  4th).  However,  more 
action  is  needed  to  increase  the  pool  of  digital 
experts.  Estimates  indicate  that  Sweden  will  have 
a  shortage  of  70,000  ICT specialists  by  2024. On 
connectivity,  Sweden  has fallen  back  to  9th place 
and  is  below  the  EU  average  on  5G  coverage.  It 
has also fallen back to 9th place for digital public 
services  (See  Annex  10).  Among  the  long-term 
barriers 
investment,  Swedish  firms  most 
frequently  cite  availability  of  skilled  staff  (90%) 
and energy costs (74%) (87). Business regulation is 
much less of an obstacle for firms in Sweden than 
for the rest of the firms in the EU, with only 10.5% 
of  firms  reporting  business  regulation  as  an 
obstacle to long-term investment compared to the 
EU average of 29.6%. 

to 

Private  investment  in  Sweden  has  been 
maintained at high levels. In 2022, net private 
investment  represented  7.5%  of  Sweden’s  GDP, 
double  the  EU  average  of  3.7%.  In  addition, 
Swedish  firms  were  among  the  top  investors  in 
developing  new  products,  processes  and  services 
in  2021 (88).  According  to  the  2022  European 
Innovation  Scoreboard,  Sweden  is  the  innovation 
leader  in  the  EU  and  is  even  increasing  its  lead 
over the other Member States (See also Annex 11). 

Access  to  finance  conditions 
in  Sweden 
remain  good.  While  the  EIF  loan  index  in  2021 
was  slightly  below  the  EU  average  and  on  a 
continuous  declining  trend  compared  to  previous 
years,  the  equity  index  remains  on  an  increasing 
trend  and  well  above  the  EU  average  (1  in  2021 
compared to the EU average of 0.23). In addition, 
the proportion of SMEs experiencing late payments 
from both private and public entities is below the 
EU average, with 31.7% in Sweden against 43%.  

Sweden  performs  well  overall  according  to 
the  Single  Market  Scoreboard.  It  displays  a 
very  low  level  of  regulatory  restrictiveness  in 
regulated  professions,  except  for  real  estate 
agents where restrictiveness is significantly above 
the EU average (EU restrictiveness indicator of 3.2 

to  1.3  for 

the  EU  average) (89). 
compared 
Integration of SMEs in the single market could be 
improved 
to  support  growth.  Swedish  SMEs 
represent a share of Swedish added value which is 
slightly  smaller  (48.1%)  than  the  EU  average 
(51.8%) (90).  To  grow,  Swedish  businesses  and  in 
particular  SMEs  could  better  exploit  opportunities 
in  the  single  market.  Overall,  imports  from  and 
exports to other EU Member States only represent 
29.2% of Swedish GDP (against 45.8% on average 
for  EU  Member  States).  According  to  the  2022 
Single  Market  Scoreboard,  Sweden  could  improve 
the transposition of directives into national law, as 
it  has  registered  a  transposition  deficit  of  2% 
(higher than the 1.6% EU average). This represents 
a  considerable  deterioration  of  1.3 percentage 
increase  among  Member 
points 
States  within  a year).  Sweden  is  in  a  group  of 
6 Member  States  that  more  than  doubled  their 
deficit within a year and consequently missed the 
1% target. Sweden also considerably increased its 
backlog  in  transposition  of  directives  with  20 
overdue  directives  compared  to  7  in  the  previous 
year 

(2nd highest 

its 

Sweden is the leading Member State with the 
highest  share  of  renewables  in  its  energy 
mix.  Sweden’s  installed  renewables  electricity 
total 
capacity  accounted  for  69.6%  of 
electricity  produced  in  2021,  far  above  the  EU 
average  of  50.9%.  However,  extended  permitting 
procedures,  in  particular  for  the  development  of 
wind  energy,  are  a  bottleneck  for  the  further 
deployment  of  renewables.  In  certain  cases,  this 
can  lead  to  a  situation  where,  once  the  project 
finally  acquires  a  construction  permit,  so  much 
time has passed that the intended technology has 
already  become  outdated. 
In  other  cases,  a 
delayed  permit 
(grid  connection  permit,  for 
example) can lead to the expiry of another permit 
(environmental  permit,  for  example).  Shortening 
the time it takes to get a permit would accelerate 
additional  investment  in  renewable  energy.  The 
permitting  procedures  for  mining  and  exploration 
activities  could  be  made  less  cumbersome,  while 
keeping  high  standards  for  impact  assessments 
(e.g.  on  local  communities,  the  climate  or  the 
of 
environment), 
stakeholders. 

consultations 

including 

(87)  EIB Investment Survey 2022 

(88)  EIB Investment Survey 2022 

(89)  Communication on updating the reform recommendations 
for regulation in professional services, COM(2021)385) 

(90)  EC, SME Performance Review, Sweden country sheet, 

1/7/2022 

49 

 
                                                 
                                                 
Table A12.1: Industry and the Single Market 

(*) Last available year 
Source: (1) AMECO, (2) Eurostat, (3) ECFIN BCS, (4) Eurostat, (5) COMEXT and Commission calculations, (6) Eurostat, (7) Eurostat, 
(8) OECD, (9) Single Market Scoreboard, (10) EIB survey, (11) Eurostat: (12) Intrum, (13) SAFE Survey, (14) EIF SME Access to 
Finance Index. 

fluorspar,  phosphate  rock,  graphite,  cobalt,  PGE, 
REE,  and  tungsten (92),  which  all  feature  on  the 
raw 
European  Commission’s 
materials.  

list  of  critical 

In  light  of  the  explosive  growth  in  demand 
for the raw materials needed to achieve the 
green  and  digital  transitions  in  Sweden  and 
in  the  EU,  Sweden  is  in  a  strong  position  to 
help  address  strategic  dependencies  by 
further  developing  value  chains  in  critical 
raw materials.  Sweden has a long-standing and 
strong  mining  tradition  and  mineral  potential,  it 
accounts  for  93%  of  all  iron  ore  produced  within 
the  EU (91).  According  to  the  Geological  Survey  of 
include  antimony, 
Sweden,  known  deposits 

(91)  Sweden’s Minerals Strategy 

(92)  Geological Survey of Sweden 

50 

POLICY AREAINDICATOR NAME20182019202020212022EU27 average (*)Net private investment, level of private capital stock, net of depreciation, % GDP (1)6.55.75.86.77.53.7Net public investments, level of public capital stock, net of depreciation, % GDP (1)1.71.71.71.51.40.4Real labour productivity per person in industry (% yoy)(2)-1.90.8-0.58.1-0.51.4Cost competitive-nessNominal unit labour cost in industry (% yoy)(2)-1.7-1.42.71-0.82.9Material shortage (industry), firms facing constraints, % (3)282011255547Labour shortage using survey data (industry), firms facing constraints, % (3)136381828Vacancy rate (business economy)(4)2.72.51.82.53.23.1Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials (5)0.160.170.170.150.180.18Installed renewables electricity capacity, % of total electricity produced (6)60.762.46569.6n.a.50.9Single Market integrationEU trade integration, % (7)25.325.523.525.529.245.8RestrictionsEEA Services Trade Restrictiveness Index (8)0.040.040.040.040.040.05Public procurement Single bids, % of total contractors (9)1089101329Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle (10)1411.17.69.210.529.6Bankruptcies, Index (2015=100)(11)n.a.n.a.n.a.n.a.n.a.86.8Business registrations, Index (2015=100) (11)n.a.n.a.n.a.n.a.n.a.121.2Payment gap - corporates B2B, difference in days between offered and actual payment (12)4418111313Payment gap - public sector, difference in days between offered and actual payment (12)4518101415Share of SMEs experiencing late payments in past 6 months, % (13)n.a.32.529.235.231.743EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1 (14)0.660.610.480.41n.a.0.46EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values between 0 and 1 (14)0.720.870.941n.a.0.23BUSINESS ENVIRONMENT - SMEsBusiness demographyLate paymentsAccess to financeHEADLINE INDICATORSEconomic StructureRESILIENCEShortagesStrategic dependenciesSINGLE MARKET 
                                                 
                                                 
 
   
 
Graph A12.2: Business environment and 
productivity drivers 

Source: 1) % of GDP, 2021 Eurostat;  
2) composite indicator, 2021 European Investment Fund 
access to finance index;  
3) average payment delay in number of days, 2022 Intrum;  
4) % of firms in manufacturing facing constraints, 2022 
European Commission business consumer survey;  
5) proportion of contracts awarded with a single bidder, 2022 
Single Market Scoreboard. 

51 

1) Businessinvestments2) EIF access tofinance index3) Payment gap- G2B3) Payment gap- B2B4) Materialshortage4) Labourshortage5) Single bidsEuropean UnionSweden 
   
 
 
 
 
 
 
 
ANNEX 13: PUBLIC ADMINISTRATION 

This  Annex  outlines  the  performance  of 
is 
Sweden’s  public  administration,  which 
essential for providing services and carrying 
out  reforms.  Sweden’s  public  administration 
continues  to  be  one  of  the  most  effective  in  the 
EU-27 (93),  however  its  overall  score  has  not 
changed  since  2017.  Current  priorities  of  the 
improving 
public 
involving 
coordination  between  municipalities, 
public  agencies  in  climate  policy,  identifying  and 
reducing  risks  of  corruption,  and  improving  how 
newly-arrived  immigrants  are  integrated  into  the 
labour market (94). 

administration 

include 

Regulatory  governance  in  Sweden  is  good. 
is  based  on  consensus-
While  policymaking 
building (95),  stakeholder  engagement 
(Graph 
A13.1)  and  ex post evaluation of legislation score 
below  the  average  for  the  EU-27  (Graph  A13.2). 
Sweden  now  makes  more  systematic  use  of  its 
central  government  portal  where  consultations, 
with  relevant  documentation,  are  posted  for 
feedback  from  relevant  stakeholders  and  the 
public (96).  Ex ante  evaluation  is  envisaged  for  all 
legislation.  Ex post  evaluation  is  not  mandatory 
and  is  normally  conducted  ad  hoc  by  a  ministry, 
government agency, or by a committee of inquiry. 
The increasing segmentation and specialisation of 
ministries presents a significant challenge, leading 
to  more 
time-consuming 
extensive 
coordination between ministries (97). 

and 

The  government  has  made  digitalisation  one 
of its priorities. Alongside Denmark, Sweden has 
the highest proportion in the EU-27 of people who 
use the internet to interact with public authorities. 
The e-government benchmark score is also above 
the  EU-27  average.  The  Swedish  recovery  and 
resilience  facility  includes  the  development  of  a 
new digital infrastructure (EUR 21 million) that will 
eventually  encompass  all  parts  of  the  public 
administration (98). 
the 

In  December  2022 

(93)  Worldwide Governance Indicators, 2021.  

(94)  SAPM (https://www.statskontoret.se/in-english/).  

(95)  Statens Offentliga Utredningar, 2022 

(https://www.sou.gov.se/fragor-och-svar-om-kommitteer/). 

(96)  Indicators of Regulatory Policy and Governance, Europe 

2022: Sweden  

(97)  European Commission, DG REFORM, Public administration 

and governance: Sweden, Publications Office of the EU, 2023 
(forthcoming).  

(98)  Recovery and Resilience Plan for Sweden 

(https://ec.europa.eu/info/business-economy-euro/recovery-

government appointed a commission of inquiry on 
how an e-identification issued by a pubic authority 
can  be  designed.  The  inquiry  will  submit  its  first 
report in October 2023.  

Graph A13.1: Sweden. Stakeholder engagement 

Source: Indicators of Regulatory Policy and Governance 
Surveys 2017 and 2021 (http://oe.cd/ireg). 

Graph A13.2: Sweden. Ex post evaluation of 
legislation 

Source: Indicators of Regulatory Policy and Governance 
Surveys 2017 and 2021 (http://oe.cd/ireg). 

coronavirus/recovery-and-resilience-facility/recovery-and-
resilience-plan-sweden_en). 

52 

0.000.501.001.502.002.503.0000.511.522.53SE2017SE2021SE2017SE2021Primary lawsSecondary lawsStakeholder engagement MethodologyOversightSystematic adoptionTransparencyEU-270.000.501.001.502.002.503.0000.511.522.53SE2017SE2021SE2017SE2021Primary lawsSecondary lawsEx-postevaluation of legislationMethodologyOversightSystematic adoptionTransparencyEU-27 
 
                                                 
   
 
   
 
                                                                              
 
Table A13.1: Public administration indicators 

(1) High values denote a good performance, except for indicator # 6. (2) 2022 value. If not available, the 2021 value is shown. 
(3) Measures the user centricity (including for cross-border services) and transparency of digital public services as well as the 
existence of key enablers for the provision of those services. (4) Defined as the absolute value of the difference between the 
percentage of men and women in senior civil service positions. 
Flags: (b) break in time series; (d) definition differs; (u) low reliability. 
Source: ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Labour Force 
Survey, Eurostat (# 4, 5, 7), European Institute for Gender Equality (# 6); Fiscal Governance Database (# 8, 9); OECD Indicators of 
Regulatory Policy and Governance (# 10).  

to  102,7%  in  2021)  and  further  improved  for 
administrative  cases  in  2021  (from  102,3%  in 
2020  to  103,4%  in  2021).  The  quality  of  the 
justice  system  is  overall  good  and  the  level  of 
digitalisation  is  advanced.  particular,  digital  tools 
are broadly  used in courts, including an electronic 
case management system, technology for distance 
communication as well as secure remote work by 
judges and staff. As regards judicial independence, 
no systemic deficiencies have been reported (100) . 

The capacity and quality of the Swedish civil 
service  remains  high.  Civil  servants  are  highly 
educated  and  are  strongly  encouraged  to  develop 
their  skills  during  their  career.  Sweden  is  among 
the  best-performing  countries  on  gender  parity  in 
senior civil service management positions. The age 
structure  of  the  civil  service  is  younger  than  that 
of 
(Table  A13.1).  The 
government has been developing new online tools 
to promote jobs in the public sector. On preventing 
corruption  and  conflicts  of  interest,  in  June  2022 
the  government  launched  a  new  initiative  for  a 
mandatory  transition  period  between  government 
positions and private sector jobs (99). 

the  EU-27  average 

The  justice  system  performs  efficiently.  The 
time  needed  to  resolve  administrative  cases  at 
first instance in 2021 was 102 days and remains 
comparatively  the  lowest  among  Member  States. 
The  clearance  rate  remains  positive  for  civil  and 
commercial  litigious cases  (from  102,8% in  2020 

(99)  European Commission, DG REFORM, Public administration 

and governance: Sweden, Publications Office of the EU, 2023 
(forthcoming). 

(100) For a more detailed analysis of the performance of the 
justice system in Sweden, see the 2023 EU Justice 
Scoreboard (forthcoming) and the country chapter for 
Sweden in the 2023 Rule of Law Report (forthcoming). 

53 

SE201720182019202020212022EU-27(2)187.2 (b)89.588.0 (b)87.993.3n/a64.82n/an/an/a75.473.676.772.93n/a0.50.60.80.80.80.8468.468.9 (b)71.572.873.4 (b)72.752.0536.538.5 (b)42.433.639.9 (b)43.116.966.08.60.60.62.23.411.071.91.8 (b)1.81.91.8 (b)1.81.580.80.80.80.70.8n/a0.791.21.21.71.71.7n/a1.5101.66n/an/an/a1.66n/a1.7Medium term budgetary framework indexIndicator (1)E-government and open government dataShare of individuals who used the internet within the last year to interact with public authorities (%)E-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with tertiary education (levels 5-8, %)Participation rate of public administration employees in adult learning (%)Gender parity in senior civil service positions (4)Ratio of 25-49 to 50-64 year olds in NACE sector OPublic financial management Strength of fiscal rules indexEvidence-based policy makingRegulatory governance 
                                                 
 
 
                                                 
 
   
 
FAIRNESS 
ANNEX 14: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  

The  European  Pillar  of  Social  Rights  is  the 
compass  for  upward  convergence  towards 
better  working  and  living  conditions  in  the 
EU. This Annex  provides an overview of Sweden’s 
progress in implementing the Pillar’s 20  principles 
and EU headline and national targets for 2030 on 
employment, skills, and poverty reduction. 

Table A14.1: Social Scoreboard for Sweden 

Update of 27 April 2023. Members States are classified on 
the Social Scoreboard according to a statistical methodology 
agreed with the EMCO and SPC Committees. It looks jointly at 
levels of and changes in the indicators in comparison with the 
respective EU averages and classifies Member States in seven 
categories. For methodological details, please consult the 
Joint Employment Report 2023; Due to changes in the 
definition of the individuals’ level of digital skills in 2021, 
exceptionally only levels are used in the assessment of this 
indicator. NEET: neither in employment nor in education and 
training; GDHI: gross disposable household income. 
Source: Eurostat 

The  labour  market  in  Sweden  is  performing 
well  overall,  but  significant  challenges 
remain  for  youth  unemployment.  Despite  a 
near-stagnating  gross  domestic product  (-0.6%  in 
Q4-2022 compared to Q4-2021), the employment 
rate  reached  82.2%  in  2022,  one  of  the  highest 
values  since  2009,  against  the  EU  average  of 
74.7%.  The  unemployment  rate  among  people 
aged 15-74 decreased from 8.8% in 2021 to 7.5% 

in  2022  which  is  above  the  EU  average  (6.1%). 
Unemployment  particularly  affects  young  people 
(aged  15-29):  the  youth  unemployment  rate  now 
stood  at  15.3%  in  2022,  which  is  well  above  the 
EU  average  of  11.3%.  At the  same time,  the  rate 
of young people not in education, employment, or 
training  (NEET)  in  the  same  age  group  is  5.7%, 
about  half  the  EU  average  of  11.7%  (indicating 
that inactivity of young people is less of an issue). 
The  European  Social  Fund  Plus  (ESF+)  will  aim 
specifically  to  activate  those  that  are  furthest 
away 
(long-term 
unemployed  people,  young  people,  older  people, 
newly  arrived  migrants,  persons  with  disabilities 
and people on sick leave who need support to get 
back to work). 

labour  market 

from 

the 

Despite  the  overall  positive  trend,  Sweden 
still  faces  difficulties  in  integrating  people 
with  a  migrant  background  into  the  labour 
market.  29.4%  of  the  population  aged  20-64  in 
Sweden are either first- (101) or second-generation 
migrants (102) (2021), compared to the EU average 
of  16.8%.  In  Q4-2022,  the  employment  rate  (20-
64  age  group)  of  first-generation  migrants  stood 
at 73.0% (EU average: 69.2%). In contrast, the one 
of people of Swedish descent (103) was 85.7% (EU 
average: 76.2%). This means that the employment 
gap between natives and first-generation migrants 
was  12.7  percentage  points  (pps),  well  above  the 
EU  average  gap  between  these  two  groups  (7.0 
pps). 
the 
employment rate was 80.2% (EU average: 74.0%), 
5.5  pps  below  people  of  Swedish  descent  (EU 
average gap: 2.2 pps). The situation is of particular 
concern for women: only 67.0% of first-generation 
migrant  women  are  employed,  in  contrast  to 
83.6% of women of Swedish descent. Even if they 
are employed, people born outside  the EU (20-64 
age group) are more likely to be at risk of poverty 
(15.2%  in  2021)  than  those  born  in  Sweden 
(4.5%).  If  they  are  unemployed,  they  are  more 
likely  to  be  in  long-term  unemployment.  Among 
native-born  unemployed  people 
(15-74  age 
group),  the  proportion  of  those  who  have  been 

second-generation  migrants, 

For 

(101) First-generation migrants are foreign-born people. 

(102) Second-generation migrants are native-born people whose 

both parents are foreign-born. 

(103) People of Swedish descent are native-born people whose 

both parents are native-born. 

54 

8.866.525.75.84.0482.27.51.9122.617.219.744.5219.98.555.81.3Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic labour markets and fair working conditionsEmployment rate(% of population aged 20-64, 2022)Unemployment rate(% of active population aged 15-74, 2022)Long term unemployment(% of active population aged 15-74, 2022)GDHI per capita growth                                                              (2008=100, 2021)Social protection and inclusionAt risk of poverty or social exclusion rate                                            (% of total population, 2021)At risk of poverty or social exclusion rate for children                       (% of population aged 0-17, 2021)Impact of social transfers (other than pensions) on poverty reduction (% reduction of AROP, 2021)Disability employment gap(percentage points, 2021)Housing cost overburden(% of total population, 2021)Children aged less than 3 years in formal childcare(% of population under 3-years-old, 2021)Self-reported unmet need for medical care(% of population 16+, 2021)Better than averageBest performersPolicy areaHeadline indicatorEqual opportunities and access to the labour marketEarly leavers from education and training(% of population aged 18-24, 2022)Share of individuals who have basic or above basic overall digital skills (% of population aged 16-74, 2021)Youth NEET rate(% of population aged 15-29, 2022)Gender employment gap(percentage points, 2022)Income quintile ratio(S80/S20, 2021) 
 
 
 
   
 
                                                 
 
unemployed  for longer  than  12  months  is  15.5%, 
while  this  figure  rises  to  30.4%  for  those  born 
outside the EU. 

Labour  demand  increased  sharply  at  the 
beginning  of  2022,  and  Sweden  has  been 
experiencing an increase in labour shortages, 
coupled  with  skills  mismatches.  The 
job 
industry,  construction,  and 
vacancy  rate  for 
services stood at 3.1% in 2022, in line with the EU 
average (2.9%).  It was highest for electricity,  gas, 
steam,  and  air  conditioning  supply  (6.3%,  EU 
average  1.7%).  Labour  shortages  are  also  felt  in 
the  service  sector,  where  the  share  of  employers 
who  report  that  the  availability  of  labour  is  a 
factor  limiting  production  stands  at  42.6%  (Q4-
2022),  one  of  the  highest  in  the  EU.  Sweden’s 
recovery  and  resilience  plan  includes  investments 
in  education  to  support  up-  and  reskilling  with  a 
strong  focus  on  the  green  transition;  this  will 
increase the number of places in higher education, 
higher  vocational  education  and  upper  secondary 
vocational  training  institutions.  The  measures  will 
contribute to reaching the 2030 national target on 
adult learning. 

Swedish workers participate to a high degree 
in training activities, but the number of early 
leavers  from  education  is  rising,  especially 
among young adults born outside the EU. The 
share  of  adults  participating  in  learning  activities 
over  the  past  4  weeks  stood  at  34.7%  in  2021, 
much higher than the EU average of 10.8%. In the 
16-74  age  bracket,  the  share  of  individuals  who 
have  basic  or  above  basic  overall  digital  skills 
stood  at  67.0%,  also  higher  than  the  EU  average 
of  54.0%.  However,  the  share  of  early  leavers 
from education or training (18-24 age group) has 
been  rising  since  2020,  reaching  8.8%  in  2022. 
Young  adults  (18-24)  born  outside  the  EU  are 
more  than twice  as  likely as  their  native  peers  to 
not  have  completed  upper  secondary  school 
(16.3% against 6.3%). (see Annex 15 for more in-
depth  analysis  on  disparities  in  access  to  high-
quality education). 

The  social  situation  is  improving,  reversing 
the long-term negative trends in poverty and 
income inequality. The share of people at risk of 
poverty  or  social  exclusion  stood  at  17.2%  in 
2021. This was below pre-pandemic levels (18.4% 
in 2019) and below the EU average of 21.7%. This 
improvement  is  partly  due  to  the  increase  in  the 
impact of social transfers (other than pensions) on 
reducing  poverty.  In  2021,  social  transfers  were 

able  to  reduce  the  at-risk-of-poverty  rate  by 
44.5%,  up  from  40.8%  in  2019  (and  more  than 
the  EU  average  of  36.4%).  Nonetheless,  this  only 
partially  compensated  the 
long-term  negative 
trend:  the  impact  of  social  transfers  on  poverty 
reduction was 66.9% in 2005, and it kept declining 
until 2017. Similar considerations apply to income 
inequality:  the  ratio  between  the  earnings  of  the 
fifth  and 
income 
the  first  quintile  of 
distribution  stood  at  4.04  in  2021  (below  the  EU 
average  of  4.97).  This  has  been  decreasing  since 
2019  (4.33),  but  it  is  still  far  above  the  lowest 
value recorded in 2005 (3.33). The risk of poverty 
or  social  exclusion  disproportionately  affects 
people  born  outside  the  EU  (39.7%)  compared  to 
the  native-born  (11.3%).  The  gap  is  as  wide  as 
28.4 pps, against the EU average of 22.0 pps. 

the 

Table A14.2: Situation of Sweden on 2030 
employment, skills and poverty reduction targets 

(1) Adult Education Survey, adults in learning in the past 12 
months (2) Number of persons at risk of poverty or social 
exclusion (AROPE), reference year 2019 
Source: Eurostat, DG EMPL 

to  partially 

Sweden  managed 
improve 
integrating  persons  with  disabilities  into  the 
labour  market  and  is  continuing  to  expand 
the  coverage  of  formal  childcare  services. 
The  disability  employment  gap  had  been  stable 
since 2015 (30.2 pps) but began a steep decline in 
2019  (24.9  pps)  and  reached  19.9  pps  in  2021 
(below  the  EU  average  of  23.0  pps).  This  was 
entirely  due  to  the  improved  conditions  of  people 
with only some activity limitations (from 19.0 pps 
in  2019  to  13.0  pps  in  2021),  while  the  situation 
deteriorated  for  people  with  severe  activity 
limitations (from 38.7 pps in 2019 to 46.7 pps in 
2021).  The  percentage  of children  aged less  than 
3  years  in  formal  childcare  has  been  rising  since 
2018 and reached 55.8% in 2021, well above the 
EU  average  of  36.6%.  Furthermore,  housing 
shortages  have  been  widespread  in  recent  years, 
reflecting  a  lack  of  affordable  housing,  as  shown 
by  the  share  of  people  living  in  overcrowded 
conditions, which is now at its highest since 2010 
(16.2%, still below the EU average of 17.1%). 

55 

IndicatorsLatest dataTrend            (2015-2022)National target by 2030EU target by 203082.2(2022)58.8(2016)-89(2021)Poverty reduction2 (thousands)-15-15 000Employment (%)8278Adult learning1 (%)6060 
 
     
 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  for 
Sweden’s education and training system in light of 
the  EU-level 
targets  and  other  contextual 
indicators  under  the  European  Education  Area 
strategic framework, based on the 2022 Education 
and Training Monitor. 

Graph A15.1: Unqualified teachers in compulsory 
schools (ISCED 1-2) in Sweden according to their 
qualification status in 2020/2021 

is 

into 

Government 
improving 
looking 
teachers’  career  progression  to  address  the 
shortage  of  qualified  teachers.  In  2020,  only 
72%  of  all  teachers  were  qualified  (varying 
between 20% and 85% depending on the type and 
level  of  education).  An  additional  12%  had  a 
teaching  degree,  but  not 
the  appropriate 
subject/school-level  qualification.  The  shortages 
are most acute for special needs teachers, subject 
teachers  in  compulsory  school  and  vocational 
teachers  in  secondary  school  (NAE,  2021b).  In 
compulsory  schools,  21%  of  teachers  were  not 
qualified  in  2020/21.  Most  (63%  of  those  21%) 
had no post-secondary pedagogical education (see 
Graph  A15.1) (104).  In  June  2022,  the  government 
proposed 
creating  a  national  professional 
programme  for  principals,  teachers,  and  teachers 
in early childhood education and care (ECEC). This 
would  create  a  national  structure  for  continuous 
professional  skills  development  and  enable 
career  progression (105). 
teachers’ 
In  higher 
initiatives  with  alternative 
education, 
pathways  to  the  teaching  profession  exist  for 
those with a previous degree. 

two 

Recent studies confirm a link between school 
choice  and  increasing  segregation  of  pupils. 
Research  suggests  that  school  choice  leads  to 
increasing segregation of pupils based on parents’ 
country  of  birth  and  level  of  education (106),  with 
the more privileged pupils (also among pupils with 
a migrant background) more often attending  

(104) National Agency for Education – NAE (2021a). Obehöriga 

lärare i grundskolan - läsåret 2020/21. Stockholm. 
Skolverket. 
https://www.skolverket.se/publikationsserier/beskrivande -
statistik/2021/obehoriga-lärare-i-grundskolan--- lasaret-
2020-21 

(105) Utbildningsdepartementet (2022), Förslag om inrättande av 

ett nationellt professionsprogram, 
https://www.regeringen.se/pressmeddelanden/2022/06/f 
örslag-om-inrattande-av-ett-nationelltprofessionsprogram/. 

Source: National Agency for Education (2021). Obehöriga 
lärare i grundskolan - läsåret 2020/21 (Unqualified teachers 
in compulsory school in 2020/21).  
Note: The calculations are based on the data from the 
teachers’ register of the National Agency for Education.  

independent  schools (107).  The  Swedish  Schools 
Inspectorate’s  investigation  into  the  selection  of 
pupils  in  independent  schools,  (including  the  link 
time  and  pupils’  migrant 
between  queuing 
background) 
that  schools  sometimes 
applied  additional  criteria  that  the  applicants  had 
not been informed about (108). 

found 

Differences  in  grading  across  schools  have 
an  impact  on  equal  opportunities.  Gap  in  the 
share  of  underachievers  according  to  socio-
economic  status  is  smaller  than  the  EU  average 
(14.5%  vs  EU:  19.3%).  Yet  more  than  one  out  of 
three  pupils  with  migrant  background  does  not 
achieve  basic  level  of  skills  in  reading.  The 
National  Agency  for  Education  (NAE)  has  found 
systemic  variation  in  the  relationship  between 
grades  and  the  results  of  national  tests.  As 
different  grading  practices  may  affect  further 
education  possibilities, 
the  Swedish  Schools 
Inspectorate  is  now  looking  into  how  to  address 
from 
this 
independent  schools  are  less  likely  to  complete 
upper  secondary  education  compared  with  their 
peers  from  municipal  schools  with  equal  grades 

issue.  Moreover,  pupils 

coming 

(107) Lärarförbundet (2022) En stor segregation bakom siffrorna. 

Bakgrunden hos elever med utländsk bakgrund på fristående 
skolor. Stockholm, Lärarförbundet. 

(106) Brandén, M., & Bygren, M. (2021). The opportunity structure 
of segregation: School choice and school segregation in 
Sweden. Acta Sociologica. 
https://doi.org/10.1177/00016993211068318 

(108) Skolinspektionen (2022) Fristående skolors mottagande och 
urval av elever till förskoleklass och grundskola. En tematisk 
tillsyn. Diarienummer: 2020:8442. Stockholm, 
Skolinspektionen. 

56 

0%10%20%30%40%50%60%70%Pedagogical university degreebut no teacher certificateCertificationfor a different type of schoolPost-secondarypedagogical educationNo post-secondary pedagogical education 
 
                                                 
  
                                                 
 
Table A15.1: EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Source: (1,3,4,5,7,8,9,10,11) = Eurostat; 2 = OECD (PISA); 6 = European Commission (Joint Research Centre). Notes: Data is not 
yet available for the remaining EU-level targets under the European Education Area strategic framework, covering 
underachievement in digital skills and participation of adults in learning. The equity indicator shows the gap in the share of 
underachievement in reading, mathematics and science (combined) among 15-year-olds between the lowest and highest quarters 
of socio-economic status. 

from  compulsory  education (109).  The  cancellation 
of  national  tests  in  2020  and  2021  due  to  the 
inflation, 
pandemic 
especially 
secondary 
schools (110). 

independent  upper 

increased  grade 

further 
in 

Participation  in  ECEC  is  high,  but  staff 
qualifications  and  language  skills  are  an 
issue.  Participation  of  children  from  3  years  to 
school  age  is  95.9%  vs  EU  93%.  However,  a 
national inquiry has shown that only 39.5% of the 
staff are qualified ECEC teachers – going down to 
even  28.5%  in  ECEC  institutions  with  minimum 
90%  of  children  with  a  migrant  background  is 
dominant. There, staff with a migrant background 
(sometimes  including  ECEC  teachers)  often  also 
lack  a  sufficient  knowledge  of  Swedish,  which 

(109) National Agency for Education – NAE (2022). 
Grundskolebetygens betydelse för resultaten i 
gymnasieskolan. Stockholm, Skolverket. 
https://www.skolverket.se/getFile?file=9360 

(110) National Agency for Education – NAE (2021b). Covid19-

pandemins påverkan på skolväsendet Delredovisning 4 – 
Gymnasieskolan. Diarienummer: 2020:1056. Stockholm. 
Skolverket. https://www.skolverket.se/getFile?file=9010 

affects 

negatively 
language 
development (111).  The  share  of  qualified  ECEC 
teachers is also low in Stockholm and Malmö. 

children’s 

Tertiary education attainment (TEA) is above 
the  EU  target,  but  the  attainment  gaps  are 
widening.  In  2022,  TEA  was  52.4%  vs  EU  42%. 
The TEA rate of young people born outside the EU 
is  lower,  at  43.4%,  however  still  high  and  above 
EU  average.  The  urban-rural  gap  in  TEA  is  one  of 
the highest in the EU (31.4 pps vs 22 pps), and it 
has doubled over the past 16 years. In 2022, the 
share of VET graduates who have been exposed to 
is  higher  than  the  EU 
work-based 
average: 67% vs EU 60.1%. 

learning 

(111) Statens offentliga utredningar - SOU (2020). Förskola för 
alla barn – för bättre språkutveckling i svenska. SOU 
2020:67. Stockholm, Statens offentliga utredningar, 
https://www.regeringen.se/contentassets/73de9759ac8a415
48fe7a7a7e3641b73/forskola-for-alla-barn--for-battre-
sprakutveckling-i-svenska-sou-202067/. 

57 

96%94.1%91.9%95.9%202093.0%2020Reading< 15%18.4% 20.0%18.4%201822.5%2018Mathematics< 15%20.8% 22.3%18.8%201822.9%2018Science< 15%21.6% 21.1%19.0%201822.3%2018< 9 %7.0%11.0%8.8% 9.6%Men7.6%12.5%10.5%11.1%Women6.4%9.4%6.8%8.0%Cities6.4%9.6%6.1%8.6%Rural areas8.2%12.2%11.0%10.0%Native5.9%10.0%6.7%8.3%EU-born11.6%20.7%:u20.3%Non EU-born14.3%23.4%17.3%u22.1%6Equity indicator (percentage points)::14.5201819.320187Exposure of VET graduates to work based learningTotal ≥ 60% (2025) : :67.0%60.1%45%46.5%36.5%52.4%42.0%Men38.9%31.2%44.2%36.5%Women54.5%41.8%60.9%47.6%Cities56.8%46.2%66.2%52.2%Rural areas31.1%26.9%34.8%30.2%Native47.2%37.7%53.8%43.0%EU-born59.9%32.7%69.7%39.5%Non EU-born41.4%27.0%43.4%35.7%39.3% 38.3%38.7%202039.2%2020Tertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth11Share of school teachers (ISCED 1-3) who are 50 years or over1Participation in early childhood education (age 3+)2Low achieving 15-year-olds in:Early leavers from education and training (age 18-24)3Total3By gender4By degree of urbanisation5By country of birth20152022IndicatorTargetSwedenEU27SwedenEU27 
                                                 
                                                 
 
   
 
(compared  to  0.9  pps  for  the  EU  overall),  raising 
long-term fiscal sustainability concerns (see Annex 
21). 

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2019-2070 

AWG reference scenario 
Source: European Commission / EPC (2021) 

in  Sweden 

In  2020,  spending  on  prevention  increased 
slightly,  with  the  share  of  total  spending  on 
preventive care rising to 3.3%, up from 3.2% 
in  2019.  Between  2020  and  2019,  spending  on 
prevention 
increased  by  11% 
(compared  to  a  26%  increase  for  the  EU  overall). 
Across  the  EU,  this  increase  was  primarily  driven 
by  spending  on  disease  detection,  surveillance, 
control  and  response  programmes  as  part  of  the 
public  health  response  to  COVID-19.  Between 
remarkable  proportional 
2019  and  2020,  a 
increase 
in 
Sweden  for  epidemiological  surveillance  and  risk 
and disease control programmes. 

in  reported  spending  was  noted 

ANNEX 16: HEALTH AND HEALTH SYSTEMS 

A  healthy  population  and  an  effective, 
accessible  and  resilient  health  system  are 
prerequisites  for  a sustainable  economy and 
society.  This  Annex  provides  a  snapshot  of 
in 
population  health  and  the  health  system 
Sweden.  

Life  expectancy  in  Sweden  remains  among 
the  highest  in  the  EU  and  has  rebounded 
after  it  fell  in  2020.  This  rebound  reflects  the 
significant  decrease  in  COVID-19  mortality  in 
2021  compared  to  2020  in  Sweden (112).  Sweden 
fares  comparatively  well  in  avoiding  deaths  from 
treatable  causes.  Leading  causes  of  death  are 
diseases of the circulatory system (“cardiovascular 
diseases”)  followed  by  cancer    and  COVID-19, 
which  accounted  for  a  large  share  of  deaths  in 
2020.  A  specific  cause  for  concern  is  Sweden’s 
comparatively high death rate due to suicide. 

Graph A16.1: Life expectancy at birth, years 

Source: Eurostat 

In  2020,  total  expenditure  on  healthcare 
increased to 11.4% of GDP, more than the EU 
average  level  (10.9%).  This  is  in  line  with  the 
upward trend in the rest of the EU, which is driven 
–  to  a  varying  extent  –  by  decreases  in  GDP  at 
Member  State  level  (for  the  EU  overall,  a  5.7% 
contraction  in  GDP  was  observed).  For  Sweden, 
public  expenditure  on  health  as  a  share  of  total 
public  spending  dropped by  0.1 percentage  points 
(pps) to 14.1% in 2020. Outpatient care (including 
home  care)  is  the  largest  category  of  health 
spending in Sweden and accounted for well over a 
third  (36%)  of  all  health  spending  in  2020. 
Inpatient  care  accounted  for  20.7%  of  total 
healthcare spending (26.4% for the EU overall) in 
2020. This presents a marked decline since 2010, 
when  the  budget  share  held  by  inpatient  care 
stood  at  26.9%.  Public  spending  on  health  is 
projected  to increase  by  1.3  pps  of  GDP  by  2070 

(112) Based on data provided directly by Member States to ECDC 
under the European Surveillance System (data current as of 
13 April 2023) 

58 

82,482,582,683,282,483,180,980,981,081,380,480,1201620172018201920202021SwedenEU6,67,20,90,80246810EUSweden% of GDP20192070increase 
 
        
                                                 
       
 
Table A16.1: Key health indicators 

Note: The EU average is weighted for all indicators, except for (*) and (**), for which the EU simple average is used. The simple 
average for (*) uses data for 2020 or most recent year if former not available. Doctors' density data refer to practising doctors in 
all countries except EL, PT (licensed to practice) and SK (professionally active). Nurses' density data refer to practising nurses in all 
countries except FR, PT, SK (professionally active) and EL (nurses working in hospitals only). 
Source: Eurostat; except: ** ECDC 

59 

20172018201920202021EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)66.665.660.262.1NA91.7 (2020)Cancer mortality per 100 000 population229.6221.3216.7214.1NA242.2 (2020)Current expenditure on health, % GDP 10.810.910.811.4NA10.9 (2020)Public share of health expenditure, % of current health expenditure84.784.885.185.9NA81.2 (2020)Spending on prevention, % of current health expenditure 3.33.43.23.3NA3.4 (2020)Acute care beds per 100 000 population204196190NANA387.4 (2019)Doctors per 1 000 population *4.34.34.3NANA3.9 (2020)Nurses per 1 000 population *10.910.910.9NANA8.3 (2020)Consumption of antibacterials for systemic use in the community, daily defined dose per 1 000 inhabitants per day (total consumption for CY and CZ) **11.310.810.38.98.714.5 (2021) 
 
   
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

This  Annex  showcases  the  economic  and 
social regional dynamics in Sweden, providing 
an  update  on  economic,  social  and  territorial 
cohesion  in  and  among  the  Swedish  regions 
compared  with  the  rest  of  the  EU  and  the  main 
regional economic recovery challenges. 

Mellersta  Norrland,  59.6%  in  Övre  Norrland  and 
55.5%  in  Norra  Mellansverige.  Accessibility  was 
also  lower  in  Småland  med  öarna  (61.4%),  due 
mainly  to  the  region’s  configuration  (one  of  its 
constituent counties, Gotland, is an island that can 
only be reached by air and sea). 

Sweden’s  regions  are  performing  well  but 
regional  disparities  have  slightly  increased 
over  the  last  two  decades.  This  is  thus  also 
increasing the gap between urban centres and the 
rest of the country.  

GDP  per  capita  (PPS)  at  country  level  was 
123%  of  the  EU  average  in  2021.  All  NUTS 2 
regions  were  above  or  close  to  this  EU  average, 
but the Stockholm capital region's figure of 178% 
was by far the highest (see Graph  A17.1).  On the 
other  side  of  the  spectrum,  Norra  Mellansverige 
had the lowest figure of 99% – so just below the 
EU average. 

Graph A17.1: Average GDP per capita growth vs 
GDP per capita in 2010 

Source: EUROSTAT, DG REGIO elaboration 

Labour productivity in Sweden is higher than 
the  EU  average  in  all  NUTS  2  regions  (see 
Graph  A17.2).  However,  the  productivity  gap 
between  the  capital  and  the  other  regions  has 
increased  over  time.  As  highlighted  by  the 
OECD (113),  lower  productivity  is  often  associated 
with  poor  transport  links,  lower  employment  in 
R&D 
knowledge-intensive 
expenditure  and  a 
tertiary 
education.  

lower 
sectors, 
lower  share  of 

The  three  northern  regions  were  much  less 
accessible  than  the  others  in  2018.  96.7%  of 
the  population  living  within  a  radius  of  120 km 
could  be  reached  in  less  than  90  minutes  in  the 
Stockholm  region,  but  this  ratio  drops  to  64%  in 

(113) OECD, Regional differences in productivity in Sweden: 
insights from OECD regions, ECO/WKP(2021)39. 

Graph A17.2: Real labour productivity in Sweden, 
2000-2019 

Source: EUROSTAT, DG REGIO elaboration 

Skilled  labour  shortages  are  an  obstacle  to 
the  regional  development  of  Sweden's  most 
northerly region. It is estimated that more than 
100 000 skilled people will be needed by 2035 in 
the  Swedish  Northern  Sparsely  Populated  Areas. 
This  constitutes  a  major  skills  gap   (114).  The  Just 
almost 
will 
Transition 
EUR 17 million  to  addressing  this  skills  mismatch 
by retraining and reskilling workers from the steel 
and metal industry in those regions. 

contribute 

Fund 

The  population  is  growing  in  all  Swedish 
regions,  mainly  due  to  migration,  but  the 
is  growing 
capital 
region's  population 
increased  by 
fastest.  Stockholm's  population 
1.52%  in  2011-2020,  while  the  population  grew 
by  only  around  0.17%  in  Mellersta  Norrland, 
0.29%  in  Övre  Norrland  and  0.37%  in  Norra 
Mellansverige.  

Sweden is an innovation leader, but there are 
notable  differences  in  regional  innovation 
performance. Stockholm was the most innovative 
region in the EU with 154.5% of the EU average in 
2021,  while  Norra  Mellansverige  and  Mellersta 
101.1% 
Norrland 

100.7% 

scored 

and 

(114)  Larsson, Peter, Rapport från samordnaren för 

samhällsomställning vid större företagsetableringar och 
företagsexpansioner i Norrbotten och Västerbotten, 
Government Offices – Ministry of Enterprise and Innovation, 
(2022)23. 

60 

 
 
 
                                                 
 
                                                 
 
 
Table A17.1: Selected indicators at the regional level – Sweden 

Source: Eurostat, EDGAR database 

respectively (115)  . All Swedish regions spend more 
on R&D  than the EU average (2% of GDP) except 
Mellersta  Norrland (0.7%),  Småland  med  öarna 
(1.2%)  and  Norra  Mellansverige 
(1.3%).  The 
Regional  Competitiveness  Index  2022  attributed 
the sixth best ranking to Stockholm (138.9% of EU 
average)  while  the  three  northern  regions  as  well 
as  Småland med  öarna  scored  just  slightly  above 
the  EU  average,  mostly  due  to  their  smaller 
markets  and  weaker 
infrastructure  (see  Map 
A17.1).  

in  Norra 
compared  with  2% 
workforce, 
Mellansverige  and  2.8%  in  Småland  med  öarna. 
Similarly,  while  Stockholm  has 
the  highest 
percentage of individuals employed in knowledge-
intensive  services  (63,8%),  Småland  med  öarna 
has  the  lowest  percentage  for  this  indicator 
(48.2%)  There  are  also  major  disparities  in  terms 
of  educational  attainment:  around  62%  of 
Stockholm's  population  has  a  tertiary  education 
degree  but  42%  in  Mellersta  Norrland  and  Övre 
Norrland   (116). 

Map A17.1:  Regional Competitiveness index 2022 - 
Sweden 

The employment rate was well  above the EU 
average  in  all  Swedish  regions  in  2021 
(80.7%  altogether).  The  rate  was  highest  in 
Mellersta  Norrland 
just  slightly  above 
(84%, 
Stockholm) and lowest in Sydsverige (77.1%). The 
high-technology sector is particularly prominent in 
the capital region, where it employs 11.5% of the 

(115) Hollanders, Hugo, Regional Innovation Scoreboard 2021, 
Publications Office of the European Union, 2021 (33).  

Sweden  has  the  fourth  highest  level  of 
unemployment  in  the  EU  (with  an  average 
8.7% compared with the EU average of 7%). 
The  unemployment  rate  was  lowest  in  Mellersta 
Norrland and Övre Norrland (both at 6.1% and the 
only  Swedish  regions  below  the  EU  average)  but 
was more than 11% in Sydsverige and still above 
the  pre-pandemic  level  in  all  regions  (with  the 
exception  of  the  most  northerly  regions,  Övre 
Norrland and Mellersta Norrland).  

The  COVID-19  pandemic  affected  the  whole 
country and caused a recession. The economic 
fallout  was  distributed  rather  unequally.  Between 
2019 and 2020, GDP per capita fell in all Swedish 
regions  –  except  Stockholm,  the  most  northern 
region  (Övre  Norrland)  and  the  most  southern 
region (Sydsverige). 

(116) The share of early leavers from education or training (aged 
18-24) has been rising since 2020, reaching 8.4% in 2021. 
The share differs significantly between rural areas and cities 
(11.0% compared with 5.8%). 

61 

GDP per head (PPS)Productivity (GVA (PPS) per person employed)GDP per head growthPopulation growthNet migrationEmployment rate, ages 20-64Unemployment rateAt-risk-of-poverty or social exclusionR&D expenditureTransport performance by carRegional Competitiveness Index (RCI)Index, EU27 = 100, 2021Index, EU27 = 100, 2021Average % change on the preceding year, 2011-2020Average annual change per 1000 residents, 2011-2020Average annual change per 1000 residents, 2011-2020% of population aged 20-64, 2021% of active population, 2021% of population, 2021% of GDP, 2019Pop. within a 1h30 journey / pop. within 120 km radius x 100, 2018Index, EU27 = 100, 2019European Union100100173722282100Sverige1231150.659.87.480.78.7               17.2             3.4        80.0120.2Stockholm1711421.0415.29.483.88.1               13.3             3.3        96.7138.9Östra Mellansverige1041040.2110.28.578.39.7               19.4             3.9        77.4117.5Småland med öarna103970.247.36.781.87.4               17.1             1.2        61.4106.1Sydsverige1051060.5810.38.077.111.1             20.2             3.6        85.4120.5Västsverige1161070.589.77.381.58.3               17.3             5.1        85.0119.9Norra Mellansverige991020.153.74.878.99.6               18.8             1.3        55.5102.8Mellersta Norrland108105-0.331.73.484.06.1               21.5             0.7        64.0106.1Övre Norrland1271210.492.93.280.06.1               14.0             2.5        59.6108.3NUTS region name 
 
 
 
 
 
                                                 
                                                 
 
  
 
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

The  Swedish  banking  system  is  large  and 
concentrated  and  characterised  by  high 
profitability  and  strong  capital  and  liquidity 
positions.  Total  banking-sector  assets  are 
equivalent  to  around  300%  of  GDP,  of  which  the 
five largest banks hold 75%. At the end of 2022, 
Sweden’s  banks  have  profitability  above  the  EU 
average  (annualised  return  on  equity  of  8.8%  vs 
6.1%  in  the  EU)  and  the  capital  adequacy  ratio 
stood  at  21.7%  (vs  18.6%  in  the  EU),  well  above 
liquidity 
existing 
coverage  ratio  amounted  to  163%.  In  late  2022, 
Swedish  banks  also  posted  the  highest  loan-to-
deposit ratio in the EU (147% vs 88.6% in the EU) 
implying a high dependence on market funding. At 
0.8%, the non-performing-loan ratio is one of the 
lowest  in  the  EU  (the  EU  average  is  1.8%). 
However,  the  leverage  ratio  (0.5%)  also  remains 
one of the lowest in the EU.  

requirements.  The 

capital 

To cover their funding gap, the largest banks 
in  Sweden  rely  on  the  domestic  and 
international  capital  markets.  This  exposes 
them  to:  (i)  changes  in  the  risk  sentiment  of 
investors;  (ii)  higher  funding  costs  or  risks  in 
accessing  funding;  and  (iii)  liquidity  shortages, 
given that some two thirds of the securities issued 
are  denominated  in  foreign  currency,  and  the 
short-term  debt  is  mainly  issued  in  dollars.  The 
banking  sector  has  tried  to  increasingly  fund  its 
activities through deposits, which has reduced the 
need  for  long-term  market-based  financing,  and 
made  funding  more  stable.  The  banks  are  now 
funded  by  roughly  equal  shares  of  deposits  from 
households/businesses and securities issued in the 
capital  markets.  Swedish  banks  also  have  large 
holdings  of  each  other’s  covered  bonds,  which 
entails 
increases 
significant  contagion  risks  in  the  event  of  a 
financial 
interest-rate 
spreads  on  banks’  bonds  over  sovereign  bonds 
seem to indicate that investors see rising risks. 

interconnectedness 

disruption. 

Increased 

and 

in 

in 

lending 

increase 

response  to  the  sharp 
inflation, 
Sveriges  Riksbank,  the  Swedish  central  bank, 
started to raise the policy rate from 0% in April to 
2.5%  in  November.  Long-term  covered  bonds 
provide  a  substantial  part  of  the  financing 
structure  of  the  banks,  and  so  the  rise in  interest 
rates  is  also  passed  on  to  mortgage  rates.  As  a 
to 
result,  year-on-year  growth 
households  eased  to  3.5%  (vs  4.4%  in  the  euro 
area) in 2022 down from 6.8% in 2021. Moreover, 
loan  losses  are  at  risk  of  increasing  in  a  system 
increasingly 
where  households  have  become 
sensitive  to  rapidly  rising  loan-servicing  costs. 
Some 73.4% of mortgage loans are financed with 
variable rates and many of the rest are on short-
term  fixed  rates.  Nearly  half  of  household 
mortgages  have  maturities  of  less  than  one  year 
before they must be refinanced. The vast majority 
of mortgage borrowers are expected to be able to 
meet  their  debt-payment  obligations,  but  some 
households may struggle to service their loans as 
high  inflation  is  eroding  disposable  income,  while 
interest costs are rising fast and house prices are 
falling.  

Graph A18.1: Evolution of credit activity 

Source: ECB. 

The  swift  tightening  by  Sweden’s  central 
bank  in  2022  has  ricocheted  through  the 
housing  market.  In  recent  years,  Sweden  had 
experienced  one  of  the  fastest  upswings 
in 
housing  prices 
in  Europe,  and  household 
indebtedness  reached  an  all-time  high  in  2021, 
with  a  debt-to-income  ratio  of  172%  in  2021, 
which is also very high by international standards. 
At  the  same  time,  house  prices  had  been  buoyed 
by  ultra-low  interest  rates.  However,  in  2022,  in 

Vulnerabilities also relate to the large share 
of  commercial  real-estate  loans  in  the  loan 
portfolios of the banks. Commercial real-estate 
companies, which are often highly leveraged, have 
continued  to  increase  their  debt  levels  in  recent 
years, and the annual growth rate of bank lending 
to  non-financial  corporations  over  2022  was  at  a 
record-high 12.5% (vs 8.0% in the euro area). This 
has made commercial real-estate companies more 
sensitive  to  changing  economic  conditions,  and  in 

62 

-2024681012141618Total privateNFCHH% 
 
 
  
 
Table A18.1: Financial soundness indicators 

(1) Last data: Q3 2022. 
(2) Data is annualized. 
Source: ECB, Eurostat, S&P Global Capital IQ Pro. 

into 

their 

feeds 

impacting 

particular  to  an  increase  in  loan-servicing  costs. 
financial  statements, 
This 
negatively 
interest  coverage  and 
property values and driving up loan-to-value ratios 
in  the  sector.  Commercial  real-estate  firms’ 
refinancing existing debt and taking out new loans 
will thus be more costly, especially for those with 
lower  creditworthiness.  In  turn,  this  may  drive 
some investors to sell properties to cope with debt 
maturities,  adding  further  downward  pressure  to 
prices with additional effects on financial stability. 
Downward  price  pressure  on  real  estate  has 
already  brought  about  a  deterioration  in  investor 
sentiment,  and  this  has  sharply  pushed  up 
refinancing  costs  in  the  bond  market.  If  the 
economy  were  to  slow  down  and  financing 
conditions  to  change,  the  market  value  of  real 
estate  could  fall  further.  Decreased  access  to 
market-based financing also increases pressure on 
the  already  exposed  banking  sector  to  provide 
financing.  Commercial 
firms  are 
increasingly using their already agreed and unused 
credit  and  liquidity  facilities  at  banks  to  secure 
funding. On the whole, this may pose an additional 
challenge for both property companies and banks. 
For  property  companies,  the  increased  proportion 
of  secured  loans  means  that  their  credit  ratings 
may be affected, while for banks the credit risk is 
becoming  more 
Cross-border 
investment  flows  and  credit  exposures  to  other 
countries  are  much  stronger  in  the  commercial 
real-estate  sector  than  in  the  residential  real-
estate sector. 

concentrated. 

real-estate 

reduce 

excessive 

borrowing, 

the 
To 
supervisory authority of Sweden has stepped 
up the macro-prudential measures that were 
eased  at  the  beginning  of  the  pandemic. 
Stress  tests  conducted  by  Sweden’s  Financial 
Supervisory  Authority  indicate  that  banks  could 
suffer  significant  credit  losses  if  financing  costs 
remain  elevated,  as  highly  leveraged  real-estate 
companies  would  face  lower  earnings.  With  this 
risk  in  mind,  the  Financial  Supervisory  Authority 
decided  to  increase  the  countercyclical  capital 
buffer to 2%, effective from June 2023. 

result 

Structural  flaws  make  the  Swedish  market 
for  corporate  bonds  vulnerable  to  stressed 
market  conditions.  Poor  liquidity,  especially  on 
the  secondary  markets,  and  a  lack  of  transparent 
price-setting  mechanisms 
in  elevated 
volatility in times of financial turbulence. The risks 
real-estate  exposures  are 
associated  with 
amplified  as  commercial  real-estate  represents  a 
significant  part  of  the  outstanding  volume  of 
corporate  bonds.  These  challenges  are  made  all 
the  greater  by:  (i)  pro-cyclicality;  (ii)  a  paucity  of 
issuers  compared  to  the  number  of  corporates 
that  have  bank  loans;  and  (iii)  a  relatively  high 
proportion  of  traded  bond  volumes  in  bonds  that 
do  not  have  a  credit  rating.  The  work  now  being 
carried  out  by  the  Riksbank,  Sweden’s  Financial 
Supervisory  Authority  and  the  private  sector  to 
liquidity  and 
increase 
increase  the  standardisation  of  issuances  (e.g.  by 
using  fully  transaction-based  reference  rates)  is 
therefore positive. 

transparency, 

improve 

63 

201720182019202020212022EUMedianTotal assets of the banking sector (% of GDP)289.6272.8279.1311.8281.8290.6276.8207.9Share (total assets) of the five largest banks (%)58.254.354.854.155.0--68.7Share (total assets) of domestic credit institutions (%)192.777.779.178.780.380.5-60.2NFC credit growth (year-on-year % change)5.76.13.64.06.812.5-9.1HH credit growth (year-on-year % change)7.05.55.15.66.83.5-5.4Financial soundness indicators:1        - non-performing loans (% of total loans)1.31.01.11.01.00.81.81.8- capital adequacy ratio (%)25.920.721.622.322.221.718.619.8- return on equity (%)210.912.210.98.410.08.86.16.6Cost-to-income ratio (%)154.251.956.557.154.557.460.651.8Loan-to-deposit ratio (%)1172.7190.7187.9163.2152.6147.088.678.0Central bank liquidity as % of liabilities0.00.00.01.20.10.0-2.9Private sector debt (% of GDP)198.7195.0200.0212.8215.3--120.7Long-term interest rate spread versus Bund (basis points)33.325.529.347.364.239.2-93.3Market funding ratio (%)61.361.262.362.262.3-50.840.0Green bonds issued to all bonds (%)0.10.72.23.65.57.63.92.31-34-1011-1718-2425-27Colours indicate performance ranking among 27 EU Member States. 
 
   
 
ANNEX 19: TAXATION  

This  Annex  provides  an 
indicator-based 
overview  of  Sweden’s  tax  system.  It  includes 
information on the tax  structure (the types of tax 
that Sweden derives most of its revenue from), the 
tax  burden  on  workers  and  the  progressivity  and 
redistributive  effect  of  the  tax  system.  It  also 
provides 
tax  collection  and 
compliance. 

information  on 

tax 

that  Sweden’s 

Sweden’s tax revenues are relatively high in 
relation to GDP, with the highest contribution 
coming  from  labour  taxation.  Table  A19.1 
revenues  as  a 
shows 
percentage  of  GDP  were  considerably  above  the 
EU aggregate in 2021. The share of labour tax in 
total  tax  revenue  is  significantly  higher  than  the 
EU  aggregate  while  the  share  of  capital  taxes  is 
clearly below the EU aggregate (see Graph A19.1). 
Revenues  from  environmental  taxes  were  slightly 
below the EU aggregate as a share of GDP and of 
total  tax  revenue.  Sweden  has  introduced  energy 
taxation  measures  in  its  RRP.  Reducing  the  tax 
deductibility of mortgage interest payments and/or 
increasing  recurrent  property  taxes  for  home 
owners  could  help  reduce  risks  related  to  high 
household debt and housing market vulnerabilities. 
Revenues from property taxes in Sweden were just 
1%  of  GDP,  which  was  significantly  below  the  EU 
taxes  on 
aggregate. 
immovable  property,  which  are  considered  to  be 
among  the  taxes  least  detrimental  to  economic 

In  addition, 

recurrent 

growth,  are  below  the  EU  aggregate.  Moreover, 
Sweden  does  not  tax  inheritances  and  gifts. 
Despite  some  minor  reforms  in  2021  and  2022, 
only  limited  progress  has  been  made  on  broader 
property tax reforms. 

inequality,  Sweden’s 

While  the  tax-benefit  system  helps  reduce 
income 
labour  tax 
burden  is  higher  than  the  EU  average  at  all 
wage  levels.  The  negative  impact  of  a  high  tax 
wedge  is  particularly  pronounced  for  vulnerable 
groups  such  as  low-income  and  second  earners. 
Graph  A19.2  shows  that  the  labour  tax  wedge  in 
Sweden  is  higher  than  the  EU  average  for  all 
income  levels.  The  tax  wedge  for  low-income 
earners at 50% of the average wage is particularly 
high compared to the EU average. The tax wedge 
for  second  earners  with  an  income  of  67%  of 
average  wage,  whose  spouses  earns  the  average 
wage,  is  at  the  EU  average.  Also,  it is identical  to 
the  tax  wedge  for  single  earners  at  this  wage 
level,  indicating  that  work  incentives  for  second 
earners  moving  into  employment  are  equal  to 
those  for  single  persons  at  67%  of  the  average 
wage.  Overall,  the  Swedish  tax-benefit  system 
reduced  income  inequality,  as  measured  by  the 
GINI  coefficient,  by  more  than  the  EU  average  in 
2021.  

Table A19.1: Taxation indicators 

(1) Forward-looking effective tax rate (OECD). 
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average 
For more data on tax revenues as well as the methodology applied, see European Commission, Directorate-General for Taxation 
and Customs Union, Taxation trends in the European Union: data for the EU Member States, Iceland, Norway and United Kingdom: 
2021 edition, Publications Office of the European Union, 2021, https://data.europa.eu/doi/10.2778/843047 and the Data on 
Taxation webpage, data https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en. 
For more details on the VAT gap, see European Commission, Directorate-General for Taxation and Customs Union, VAT gap in the 
EU: report 2022, Publications Office of the European Union, 2022, https://data.europa.eu/doi/10.2778/109823. 
Source: European Commission, OECD. 

64 

2010201920202021202220102019202020212022Total taxes (including compulsory actual social contributions) (% of GDP)42.942.842.442.841.737.939.940.040.6Labour taxes (as % of GDP)24.224.924.624.220.020.721.320.9Consumption taxes (as % of GDP)12.611.912.011.910.811.110.711.2Capital taxes (as % of GDP)6.16.05.86.77.18.18.08.5Total property taxes (as % of GDP)1.01.11.01.01.92.22.22.2Recurrent taxes on immovable property (as % of GDP)0.70.70.70.71.11.21.21.1Environmental taxes as % of GDP2.72.12.01.92.42.42.22.2Tax wedge at 50% of average wage (Single person) (*)39.038.838.937.937.533.932.331.932.131.7Tax wedge at 100% of average wage (Single person) (*)42.842.642.742.542.441.040.139.939.739.7Corporate income tax - effective average tax rates (1) (*)20.420.419.719.519.419.1Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)10.39.89.69.98.67.78.17.8Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)0.20.431.640.7VAT Gap (% of VAT total tax liability, VTTL)3.32.011.09.1SwedenEU-27Tax structureProgressivity & fairnessTax administration & compliance 
 
 
 
 
     
 
 
 
 
 
 
 
Graph A19.1: Tax revenues from different tax types as % of total taxation 

Note: Values for EU are GDP-weighted EU averages (EU aggregates) 
Source: European Commission 

tax 

and 

Sweden  performs  relatively  well  on  tax 
compliance 
administration. 
Outstanding  tax  arrears  are  0.4%  of  total  tax 
revenue in  2020 (0.2%  in  2019)  and  significantly 
below  the  EU  average  of  40.7%.  The  EU  average 
could however be inflated due to a small  number 
of Member States with very high values. Features 
of  the  Swedish  tax  system  that  contribute  to  low 
arrears  are  a  strong  focus  on  cooperative 
compliance,  a  high  proportion  of  source-based 
taxation, and the use of tax  accounts, which each 
individual and company has with the Swedish Tax 
Agency,  to  make  payments.  Furthermore,  the  VAT 
gap  (the  gap  between  revenues  actually  collected 
and  the  theoretical  tax  liability)  was  2%  in  2020, 
significantly below the EU-average of 9.1%. 

Graph A19.2: Tax wedge for single and second 
earners as a % of total labour costs, 2022 

Note: Second earner tax wedge assumes first earner at 100% 
of the average wage and no children. 
Source: European Commission 

65 

37.539.542.450.339.5202530354045505550100150Tax wedge, % of total labour costsEarnings in % of the average wageSingle earner - SESingle earner - EU averageSecond earner -  SESecond earner -  EU average51.4327.5421.0156.5927.7215.69Tax revenue shares in 2021, Sweden (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital3.324.320.991.000.140.191.552.640.902.750123456Sweden -environmentaltaxationEU -environmentaltaxationSweden -property taxationEU - propertytaxationEnvironmental and property taxation as % of total tax revenue, Sweden and the EUEnergy taxesTransport taxesResource/pollution taxesRecurrent property taxesOther property taxes 
 
 
 
 
 
 
 
 
 
 
 
     
 
 
 
 
 
     
 
ANNEX 20: TABLE WITH ECONOMIC AND FINANCIAL INDICATORS 

Table A20.1: Key economic and financial indicators 

(1) Domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
(2) Net international investment position (NIIP) excluding direct investment and portfolio equity shares.  
Source: Eurostat and ECB as of 2 May 2023, where available; European Commission for forecast figures (Spring forecast 2023). 

66 

2004-072008-122013-1920202021202220232024Real GDP (y-o-y)3.80.72.4-2.25.42.6-0.51.1Potential growth (y-o-y)2.71.72.11.92.01.81.61.5Private consumption (y-o-y)3.31.72.3-3.26.32.1-1.71.2Public consumption (y-o-y)0.51.41.4-1.82.80.00.70.1Gross fixed capital formation (y-o-y)6.9-0.53.41.76.05.2-3.2-0.2Exports of goods and services (y-o-y)7.70.83.7-5.510.06.62.02.6Imports of goods and services (y-o-y) 7.51.23.9-6.011.58.7-1.11.4Contribution to GDP growth:Domestic demand (y-o-y)3.21.02.2-1.55.02.2-1.40.5Inventories (y-o-y)0.1-0.10.1-0.70.51.0-0.70.0Net exports (y-o-y)0.5-0.10.00.0-0.1-0.61.60.7Contribution to potential GDP growth:Total Labour (hours) (y-o-y)0.60.70.70.40.50.50.60.5Capital accumulation (y-o-y)0.80.60.80.80.90.90.80.7Total factor productivity (y-o-y)1.30.40.60.70.60.40.20.3Output gap1.6-1.6-0.2-3.7-0.50.3-1.8-2.1Unemployment rate6.97.97.38.58.87.57.78.2GDP deflator (y-o-y)1.41.71.92.02.95.75.71.6Harmonised index of consumer prices (HICP, y-o-y)1.31.91.20.72.78.16.01.9HICP excluding energy and unprocessed food (y-o-y)0.81.61.11.51.65.56.42.7Nominal compensation per employee (y-o-y)4.03.02.62.54.32.84.03.7Labour productivity (real, hours worked, y-o-y)2.40.11.11.12.70.3-1.50.4Unit labour costs (ULC, whole economy, y-o-y)1.12.81.73.40.22.94.82.8Real unit labour costs (y-o-y)-0.31.0-0.21.3-2.6-2.7-0.81.2Real effective exchange rate (ULC, y-o-y)-0.61.9-2.30.33.1-5.4-6.8-1.0Real effective exchange rate (HICP, y-o-y)-0.40.3-2.22.63.1-6.2..Net savings rate of households (net saving as percentage of net disposable income)4.710.413.417.015.913.4..Private credit flow, consolidated (% of GDP)12.77.88.114.416.6...Private sector debt, consolidated (% of GDP)153.3190.5194.9212.8214.8...of which household debt, consolidated (% of GDP)61.375.185.093.792.3...of which non-financial corporate debt, consolidated (% of GDP)92.1115.4109.8119.2122.5...Gross non-performing debt (% of total debt instruments and total loans and advances) (1)..1.00.80.8...Corporations, net lending (+) or net borrowing (-) (% of GDP)4.42.1-1.91.90.5-0.51.31.0Corporations, gross operating surplus (% of GDP)25.424.524.225.626.326.726.826.3Households, net lending (+) or net borrowing (-) (% of GDP)0.53.95.36.96.14.35.66.0Deflated house price index (y-o-y)10.11.54.73.38.0-3.4..Residential investment (% of GDP)3.93.74.84.95.25.2..Current account balance (% of GDP), balance of payments7.16.13.65.96.54.35.86.2Trade balance (% of GDP), balance of payments6.75.23.74.54.62.4..Terms of trade of goods and services (y-o-y)-0.4-0.1-0.11.00.6-3.30.8-0.3Capital account balance (% of GDP)-0.2-0.2-0.10.10.00.1..Net international investment position (% of GDP)-11.8-8.9-1.59.923.839.8..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2)-21.4-22.1-16.1-9.70.0-5.4..IIP liabilities excluding non-defaultable instruments (% of GDP) (2)122.5153.3160.5155.5146.9169.1..Export performance vs. advanced countries (% change over 5 years)5.4-5.6-7.83.75.9...Export market share, goods and services (y-o-y)-0.7-4.3-0.74.1-0.92.6-0.6-1.2Net FDI flows (% of GDP)2.32.51.40.71.12.5..General government balance (% of GDP)1.8-0.10.1-2.80.00.7-0.9-0.5Structural budget balance (% of GDP)..0.2-0.70.30.60.10.7General government gross debt (% of GDP)44.938.240.939.836.533.031.430.7forecast 
 
 
 
     
 
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

growth  at  around  1.8%  over  2025-2033. 
Government gross financing needs are expected to 
remain  small  over  the  projection  period,  declining 
to around 1% of GDP in 2033, well below the level 
forecast for 2024. 

primary 

structural 

The  baseline  projection 
is  stress  tested 
against  four  alternative  scenarios  to  assess 
the  impact  of  changes  in  key  assumptions 
(Graph 1).  Overall,  the  baseline  debt  projection 
for  Sweden  is  very  robust  to  changes  in  the 
underlying  macroeconomic  assumptions.  Indeed, 
alternative  scenarios  do  not  lead  to  significant 
deviations  of  the  debt-to-GDP  ratio.  Reverting  to 
the 
balance 
historical 
(corresponding 
to  a  15-year  average),  as 
stipulated in the ‘historical SPB ‘scenario, lowering 
the improvement of the structural primary balance 
by  half  of  the  cumulative  forecast  change,  as 
described in the ‘lower SPB ‘scenario, or assuming 
a temporary worsening of financial conditions (i.e. 
temporarily  increase  of  interest  rates  by  1  pp.  on 
newly  issued  debt),  as  reflected  in  the  ‘financial 
stress  ‘scenario,  would  lead  to  a  public  debt-to-
GDP  ratio  by  2033  close  to  the  baseline.  A 
the  macro-financial 
permanent  worsening  of 
conditions,  as  displayed  under 
‘adverse 
interest-growth rate differential’ scenario (i.e. 1 pp. 
higher  than  the  baseline),  would  only  slightly 
increase the debt-to-GDP ratio by around 2 pps. of 
GDP by 2033 as compared with the baseline.  

the 

low 

risk 

(Graph 2). (120) 

Additionally,  stochastic  debt  projections 
indicate 
These 
stochastic  simulations  point  to  a  16%  probability 
of  the  debt  ratio  in  2027  being  greater  than  in 
2022,  entailing  low  risk  given  the  initial  low  debt 
level.  In  addition,  such  shocks  point  to  a  small 
degree  of  uncertainty  (i.e.  the  difference  between 
the  10th  and  90th  debt  distribution  percentiles) 
surrounding 
the  government  debt  baseline 
projections. 

This  Annex  assesses  fiscal  sustainability 
risks for Sweden over the short, medium and 
long term. It follows the same multi-dimensional 
approach  as  the  European  Commission’s  2022 
Debt Sustainability Monitor, updated based on the 
Commission 2023 spring forecast. 

1  -  Short-term  risks  to  fiscal  sustainability 
low  overall.  The  Commission’s  early-
are 
detection  indicator  (S0)  does  not  signal  major 
short-term  fiscal  risks  (Table A21.2). (117)  Gross 
financing  needs  are  expected  to  be  around  7.5% 
of  GDP  in  the  short  term  (i.e.  over  2023-2024), 
declining  compared  with  the  recent  peak  in  2020 
Financial  markets’ 
(Table  A21.1, 
perceptions  of  sovereign  risk  are 
investment 
grade, as confirmed by the main rating agencies. 

Table 1). 

2 - Medium-term risks to fiscal sustainability 
are low overall.   

The  DSA  for  Sweden  shows  that,  under  the 
baseline, government debt ratio, is projected 
to  decline  over  the  medium  term  (at  15.7% 
of  the  GDP  in  2033).  (Graph 1) (118), (119)  The 
assumed  structural  primary  balance  (a  surplus  of 
1.3%  of  GDP)  contributes  to  these  developments. 
At  the  same  time,  the  baseline  projection  up  to 
2033  benefits  from  a  favourable 
(although 
diminishing) snowball effect, notably thanks to the 
impact  of  Next  Generation  EU,  with  real  GDP 

(117) The S0 is a composite indicator of short-term risk of fiscal 
stress. It is based on a wide range of macro-financial and 
fiscal variables that have proven to perform well in the past 
in detecting situations of upcoming fiscal stress.  

(118) The assumptions underlying the Commission’s ‘no-fiscal 
policy change’ baseline notably comprise: (i) a structural 
primary surplus, before ageing costs, of 1.3% of GDP as of 
2024; (ii) inflation converging linearly towards the 10-year 
forward inflation-linked swap rate 10 years ahead (which 
refers to the 10-year inflation expectations 10 years from 
now); (iii) the nominal short- and long-term interest rates on 
new and rolled over debt converging linearly from current 
values to market-based forward nominal rates by T+10 (as 
for all Member States); (iv) real GDP growth rates from the 
Commission 2023 spring forecast until 2024, followed by 
EPC/OGWG ‘T+10 methodology projections between T+3 and 
T+10, i.e. for 2025-2033 (on average 1.8%); (v) ageing costs 
in line with the 2021 Ageing Report (European Commission, 
Institutional Paper 148, May 2021). For information on the 
methodology, see the 2022 Debt Sustainability Monitor 
(European Commission, Institutional Paper 199, April 2023). 

(119) Table 1 shows the baseline debt projections and its 

(120) These projections show the impact on debt of 2000 different 

breakdown into the primary balance, the snowball effect (the 
combined impact of interest payments and nominal GDP 
growth on the debt dynamics) and the stock-flow 
adjustment.  

shocks affecting the government’s primary balance, 
economic growth, interest rates and exchange rates. The 
cone covers 80% of all simulated debt paths, therefore 
excluding tail events 

67 

 
 
                                                 
 
 
 
                                                 
 
 
base), a relatively low share of public debt held by 
non-residents and historically low borrowing costs 
reflecting a long-standing strong creditor status. In 
international 
addition,  Sweden’s  positive  net 
investment 
mitigating 
helps 
vulnerabilities.  In  addition,  the  structural  reforms 
under  the  NGEU/RRF,  if  fully  implemented,  could 
have  a  further  positive  impact  on  GDP  growth  in 
the  coming  years,  and  therefore  help  to  mitigate 
debt sustainability risks. 

position 

3  -  Long-term  risks  to  fiscal  sustainability 
are low overall. (121)  

The  S2  sustainability  gap  indicator  (at  0.9 
pps.  of  GDP)  points  to  low  risk,  indicating 
that  Sweden  would  need  to  only  slightly 
improve  its  structural  primary  balance  to 
ensure debt stabilisation over the long term. 
This  result  is  underpinned  by  the  very  favourable 
initial  budgetary  position  (-1.2  pps.  of  GDP)  that 
partially compensates for the projected increase in 
ageing  costs  (2.1  pps.  of  GDP),  mainly  resulting 
from  an  increase  in  long-term  care  and  health 
care costs (Table 2).  

Combined  with  low  debt  vulnerabilities,  as 
highlighted by the S1 indicator, overall long-
term risks are assessed as low. Indeed, the S1 
sustainability  gap  indicator  S1  (at  -1.5  pps.  of 
GDP) signals that the country has sufficient safety 
margin to maintain its debt below the 60% of GDP 
reference  target  by  2070.  This  result  is  mainly 
driven by the favourable initial budgetary position 
(contribution  of  -1.6  pps.  of  GDP)  and  the  low 
starting  level  of  the  Swedish  government  debt 
ratio (contribution of -0.8 pp. of GDP), which more 
than  compensate  for  the  expected  increase  in 
ageing  costs  by  2070  (contribution  of  0.9  pp.  of 
GDP) (Table 2). 

Finally,  several  additional  risk  factors  need 
to  be  considered  in  the  assessment.  On  the 
one hand, risk-increasing factors are related to the 
recent  increase  in  interest  rates,  a  relatively  high 
share  of  short-term  public  debt  and  contingent 
liability  risks  stemming  from  the  private  sector. 
However, this risk remains currently limited due to 
relatively  low  take-up  so  far.  On  the  other-hand, 
risk-mitigating factors include the stability of debt 
maturity in recent years, relatively stable financing 
sources  (with  a  diversified  and  large  investor 

(121) The S2 fiscal sustainability indicator measures the 

permanent SPB adjustment in 2024 that would be required 
to stabilise public debt over the long term. It is 
complemented by a revised S1 indicator, which measures the 
fiscal gap in 2024 to bring the debt-to-GDP ratio to 60% in 
the long-term. For both S1 and S2 indicators, the risk 
assessment depends on the amount of fiscal consolidation 
needed: ‘high risk’ if the required effort exceeds 6 pps. of 
GDP, ‘medium risk’ if it lies between 2 pps. and 6 pps. of 
GDP, and ‘low risk’ if the effort is negative or below 2 pps. of 
GDP. The overall long-term risk classification brings together 
the risk categories derived from S1 and S2. S1 may notch up 
the risk category derived from S2 when it signals a higher 
risk than S2. See the 2022 Debt Sustainability Monitor for 
further details. 

68 

 
                                                 
Table A21.1: Debt sustainability analysis - Sweden 

Source: Commission services. 

Table A21.2: Heat map of fiscal sustainability risks - Sweden 

Source: Commission services. 

69 

Table 1. Baseline debt projections20202021202220232024202520262027202820292030203120322033Gross debt ratio (% of GDP)39.836.533.031.430.729.628.126.224.422.720.919.117.415.7Changes in the ratio4.4-3.3-3.5-1.5-0.7-1.1-1.5-1.9-1.7-1.8-1.8-1.8-1.8-1.7of whichPrimary deficit2.5-0.2-1.20.2-0.1-0.5-0.9-1.3-1.3-1.3-1.3-1.3-1.3-1.3Snowball effect0.4-2.9-2.4-0.9-0.3-0.7-0.6-0.6-0.4-0.4-0.4-0.4-0.4-0.4Stock-flow adjustments1.5-0.20.0-0.8-0.40.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)12.68.78.07.67.57.26.65.85.04.23.42.61.81.1S1S2Overall index  (pps. of GDP)-1.50.9of which Initial budgetary position-1.6-1.2Debt requirement-0.8Ageing costs0.92.1of which    Pensions-0.20.0     Health care0.40.6     Long-term care1.11.8Others-0.4-0.4Table 2. Breakdown of the S1 and S2 sustainability gap indicators05101520253035404520202021202220232024202520262027202820292030203120322033Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p900102030405020202021202220232024202520262027% of GDPGraph 2. Stochastic debt projections 2023-2027MedianBaselineBaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallLOWLOWLOWLOWLOWLOWDebt level (2033), % GDP15.716.515.217.515.8Debt peak year20222022202220222022Fiscal consolidation space60%60%64%60%60%Probability of debt ratio exceeding in 2027 its 2022 level16%Difference between 90th and 10th percentiles (pps. GDP)17.1(1)Debtlevelin2033.Green:below60%ofGDP.Yellow:between60%and90%.Red:above90%.(2)Thedebtpeakyearindicateswhetherdebtisprojectedtoincreaseoveralloverthenextdecade.Green:debtpeaksearly.Yellow:peaktowardsthemiddleoftheprojectionperiod.Red:latepeak.(3)Fiscalconsolidtationspacemeasurestheshareofpastfiscalpositionsinthecountrythatweremorestringentthantheoneassumedinthebaseline.Green:highvalue,i.e.theassumedfiscalpositionisplausiblebyhistoricalstandardsandleavesroomforcorrectivemeasuresifneeded.Yellow:intermediate.Red:low.(4)Probabilityofdebtratioexceedingin2027its2022level.Green:lowprobability.Yellow:intermediate.Red:high(alsoreflectingtheinitialdebtlevel).(5)thedifference between the 90th and 10th percentiles measures uncertainty, based on the debt distribution under 2000 different shocks. Green, yellow and red cells indicate increasing uncertainty.Short termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)LOWLOWLOWLOWLOW 
 
 
 
 
 
 
 
   
 
 
   
 
ANNEX 22: MACROECONOMIC IMBALANCE PROCEDURE ASSESSMENT MATRIX  

The  Macroeconomic 
Imbalance  Procedure 
matrix presents the main elements of the in-
depth  review  undertaken  for  Sweden (122).  
Sweden was selected for an in-depth review in the 
in-depth 
2023  Alert  Mechanism  Report.  This 
review  on  the  prevention  and  correction  of 
macroeconomic  imbalances  presents  the  main 
findings  on  the  gravity  and  evolution  of  the 
challenges  identified,  as  well  as  policy  responses 
and potential policy needs. Findings cover all areas 
of vulnerability assessed in the in-depth review.  

their 

Sweden  is  facing  vulnerabilities  relating  to 
high private debt and house price valuations 
that are still stretched. Private debt to GDP was 
recorded at 217% of GDP in 2022. Household debt 
stood  at  88%  of  GDP  in  2022.  Both  metrics 
continue  to  be  at  or  around  the  historical  highs 
and  well  above 
respective  prudential 
thresholds and fundamental benchmarks, although 
household  debt  has  declined  a  bit  from  its  2020 
peak.  Household  debt  as  a  percentage  of 
disposable  income  reached  181%  in  2022,  below 
its 2021 peak. Net wealth is under pressure due to 
the  decline  in  house  prices  while  debt  remains 
high. Nominal house prices peaked in the first half 
of  2022  and  then  started  to  decline.  Real  house 
prices declined even more, after a sustained period 
during  which  house  prices  grew  faster  than 
income. 
indebted 
In  addition,  the  budget  of 
homeowners  is  under  pressure  from  increased 
interest rates and, for tenant-owners, by increases 
in  tenant-owner  association  fees.  Going  forward, 
the  risk  of  renewed  imbalances  is  sizeable  since 
the drivers of the imbalances remain in place with 
the  sharp  decline  in  construction  activity  risking  a 
shortage in supply of new dwellings. 

Going forward, net wealth will decline in the 
short-term,  and  there  are  risks  associated 
with  the  impact  of  the  reductions  in  house 
prices. The increased mortgage rates and the loss 
in  real  disposable  income  are  the  main  factors 
driving  the  recent  house  price  decline.  The  more 
recent  homeowners  have  increased  their  housing 
consumption, the closer their net wealth will come 
to negative territory.  New entrants to the housing 
market  are  known  to  have  a  relatively  limited 
in  particular,  but  also  those 
housing  equity, 

(122)  European Commission (2023), In-Depth Review for Sweden, 
Commission staff working document (COM(2023) 644 final),  
in accordance with Article 5 of Regulation (EU) No 
1176/2011 on the prevention and correction of 
macroeconomic imbalances.  

70 

resilient 

labour  market 

households  having  moved  to  more  expensive 
houses – ie. from an apartment to a single-family 
home – are likely to see a sharp decrease in their 
housing  equity.  The  central  scenario  assumes  a 
quite 
in  which 
unemployment  remains  contained  and  there  is 
room  for  wage  increases  compensating  for  a 
significant  part  of  the  loss  in  real  disposable 
income.  Avoiding  the  uncontrolled  unwinding  of 
the  macro  imbalances  defined  earlier  hinges  on 
the  absences  of  significant  feedback  effects 
between  a  reduction  in  house  prices  and  the 
labour market. The reduction in employment in the 
construction  sector  will  be  a  first  test  of  this 
assumption. Another risk factor is the commercial 
real  estate  sector  that  has  increased  leverage  in 
recent  years  and  still  has  to  adapt  to  new  work 
and  shopping  patterns  following  the  pandemic  in 
addition  to  facing  increased  capital  costs  and 
broader negative developments in real estate.   

Several  policy  initiatives  can  support  the 
reduction  of  macroeconomic  vulnerabilities. 
The  Swedish  recovery  plan  will  ease  building 
constraints  and  support  construction  of  rental 
housing.  A  policy  gap  still  remains,  however.  In 
particular,  the  tax  incentives  for  debt-financed 
housing  acquisition  and  low  recurrent  property 
taxation  remain  in  place.  Phasing  out  mortgage 
interest  payments  deductibility  could  be  designed 
in a way that benefits first-time buyers. The rental 
market  still  functions  poorly  and  hardly  offers  an 
alternative to housing acquisition for new entrants 
in the housing market. The absence of wealth and 
debt  data  at  household 
the 
of  housing  market 
heterogeneous 
developments  and  policy  measures  on  different 
groups.  This  database  should  include  the  debt 
owed  by  tenant-owners  indirectly  through  the 
tenant-owner  associations.  The  impact  of  interest 
changes  could  have  been  reduced  if  penalty  fees 
for  lengthening  interest  fixation  periods  had been 
lower  –  doing  so  now,  at  the  time  of  interest 
increases,  would  be  a  policy  investment  for  the 
future.  Borrower-based  measures 
could  be 
strengthened to reduce the debt service burden on 
households,  by  strengthening  the  amortization 
requirement  and  including  the  debt  of  tenant-
owner associations in the LTV ratio. 

impact 

level 

fogs 

Based  on  this  assessment,  the  Commission 
considered  in  its  communication  European 
Semester – 2023 Spring Package (COM(2023) 
600 
to 
experience imbalances. 

that  Sweden  continues 

final) 

 
 
                                                 
 
 
Table A22.1: Assessment of macroeconomic imbalances matrix 

Source: European Commission 

71 

Gravity of the challengeEvolution and prospectsPolicy responseUnsustainable trends, vulnerabilities and associated risksPrivate debtSweden continues to have a high level of private debt, at 217% GDP in 2022.  Debt of non-financial corporations (NFCs) stood at 129% GDP and household debt at 88% GDP, both well above prudential and fundamental-based benchmarks indicating that strong deleveraging needs remain. Private real estate-related debt is a particular concern. While household debt stood at 181% of gross disposable income in 2022, including debt owned by tenant-owner associations adds 20 pps to the debt-to-income ratio. Households have good repayment ability and liabilities are on average more than offset by assets but the distribution of debt and assets across age groups is uneven and many household assets are exposed to liquidity and/or market risks. Non-financial corporate debt is high, but matched by a high value of corporate assets and significant equity cushions. Exposure to external financing in market debt instruments is high. Commercial real estate companies are a cause for concern as they are the largest exposure by industry group of Swedish banks. Banks rely on wholesale funding and are well-capitalised, with high profitability and non-performing loans among the lowest in the EU. Bank lending to households, CREs and tenant-owner associations represent 2/3 of all  lending. Private debt grew by 2 ½ percentage points in 2022. Bank lending to the non-financial private sector increased by 8.2% yoy 2022, up from 4.6% yoy in 2021. Lending to the private sector was still above historical average in January 2023. Whereas lending to households is slowing, lending to non-financial corporations is registering high growth.Interest payments are increasing after having been low over an extended period of time. The Riksbank projects after-tax interest payment to increase to 6 % of income by 2025.  After-tax interest payments were some 2 ½  % of disposable income in 2021. Commercial real estate companies have found it increasingly hard to access market financing and are switching to bank lending. Further increases in yield requirements and funding costs can put between 20 % and 35 % of CRE debt at risk.Banks' profitability has increasingly depended on increasing loan volume as the gross margins (interest and service charges) has declined. Lower turnover in the housing market is reflected in lower new mortgages. Bond markets have become less liquid which complicates market pricing of risks.On 22 June 2022, the FSA announced that the countercyclical capital buffer will be raised as from June 2023 to 2%, which it deems is its neutral level.Policy gaps remain regarding the incentives to take on mortgage debt. There have been no changes to mortgage interest payments deductibility or recurrent property taxation. The amortization requirement's calculations of relevant LTV and LTI ratios does not include debt owned by tenant-owner assocations. An inquiry on new statistics on individual household assets and liabilities has been launched. If established, this database can provide better insights into risks at individual household level. Through expanding analyses of the CRE companies' financial situation, policy makers are increasingly aware of the risks. Beyond an increase in the CCyB to the neutral level in June 2023 and a 2020 increase in capital requirements by the FSA, no significant policy action is yet designed.The Riksbank has entered into a quantitative tightening cycle with an active reduction in its government bond holdings and a passive reduction in other bond holdings (mostly covered bonds).Housing marketHouse price growth went into reverse in 2022 following an almost uninterrupted increase since the second half of the 1990s. During the pandemic house prices had actually increased faster than on average in the preceding decade. Swedish house prices appear to be overvalued by 29%. High house prices are driven predominantly by a combination of bottlenecks to housing supply, especially in the main urban areas, combined with a favourable tax treatment of homeownership and mortgage debt, as well as a malfunctioning rental market.Overvalued house prices combined with a large mortgage debt entail risk of disorderly unwinding with adverse consequences for the real economy and, potentially, the banking sector.House prices peaked in the first half of 2022 and then started to decline. Further price declines are expected in 2023 as fundamentals like income and interest put house prices under pressure.The authorities have taken limited measures and have not addressed the main policy factors driving debt-financed housing acquisition: a malfunctioning rental market offering no alternative to the to-buy market, mortgage interest deductibility and low recurrent property taxation. Several inquiries have been launched including one on a database with individual household data of debt and assets. Such a database would help to understand the individual risk to household's balance sheets and inform policy design. The government has relaxed permitting procedures through the introduction of a certified construction project company that can lower demands on construction from the municipal planning process (31 December 2022) and through the private right of initiative (31 December 2021).