COMMISSION STAFF WORKING DOCUMENT 2024 Country Report – Sweden Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Sweden
Date: 2024-06-19
Institutions: European Commission, Secretariat-General
Subjects: Sweden, budget policy, economic policy, economic recovery, economic reform, employment policy, fiscal policy, housing policy, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 19.6.2024  SWD(2024) 627 final  COMMISSION STAFF WORKING DOCUMENT 2024 Country Report – Sweden Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Sweden    {COM(2024) 627 final} - {SWD(2024) 600 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

to  7.6%  of  GDP  as  imports  stalled  with  the 
stagnating  economy,  while  exports  grew. 
Swedish  companies  currently  benefit  from 
relatively  high 
levels  of  productivity  and 
profitability,  and  have  also  been  helped  by 
modest  recent  increases  in  labour  costs.  In 
krona  weakened 
addition, 
markedly 
price 
supporting 
competitiveness, even though the currency has 
regained  some  ground  since  the  third  quarter 
of 2023. 

the  Swedish 

2023, 

in 

Inflation  is  set  to  moderate.  The  impact 
from  previous  inflationary  shocks  is  set  to 
fade  in  2024,  while  trade  and  production 
bottlenecks  are  also  set  to  ease  this  year. 
Consumer  price  inflation,  as  measured  by  the 
HICP, is set to moderate to around 2% in both 
2024 and 2025. Domestic wage pressures are 
projected  to  remain  relatively  contained  over 
the medium term, with labour unions expected 
to moderate their demands for an increase in 
wages  to  help  sustain  employment  and 
competitiveness.  However,  the  risk  of  higher 
labour  costs  might  re-emerge  when  the 
economic  recovery  takes  hold,  as  employees 
might shift to better-paid jobs to make up for 
the 
in  purchasing  power  they  have 
experienced recently. 

loss 

The  labour  market  has held  up  relatively 
well  in  recent  years  but  faces  structural 
challenges.  As  can  be  seen  in  the  Social 
Scoreboard,  which  monitors  progress  under 
the  European  Pillar  of  Social  Rights,  the 
employment  rate  in  Sweden  is  one  of  the 
highest in the EU (see Annex 14). Even though 
unemployment is set to rise this year and next 
due to the weak economy, there continue to be 
labour  shortages  in  several  sectors  due  to 
significant  mismatches  and  skills  shortages 
that  have  persisted  over  several  years.  The 
skills  shortages  might  give  employers  an 
labour  even  during 
incentive 
potential  periods  of  economic  weakness, 
making  employment  more  resilient  to  the 

‘hoard’ 

to 

Strong fundamentals, but room for 
improvement 

The  tightening  of  financial  conditions  is 
set to keep economic activity subdued. (1) 
The  Swedish  economy  shrank  marginally  by 
0.2%  in  2023,  following  real  GDP  growth  of 
2.7%  in  2022.  This  weak  performance  was 
in  financial 
mainly  due  to  a  tightening 
conditions. 
investments 
impacted 
This 
(particularly the construction of dwellings) and 
consumption  due  to  a  squeeze  on  household 
budgets from higher debt-servicing costs (see 
Graph  1.1).  The  economy  is  expected  to 
bottom  out 
in  mid-2024  and  return  to 
moderate growth in 2025. 

Graph 1.1: Real GDP and gross fixed capital 
formation (GFCF) in construction 

Source: European Commission 

External  competitiveness  is  mirrored  in 
the strong position of Swedish exporters. 
In  2023,  the  current  account  surplus  widened 

(1)  The cut-off date for the data used to prepare the 27 

Country Reports was 15 May 2024. 

2 

-10-8-6-4-202468Q-o-Q growth, %GDP - Total economyGFCF - Other buildings and structuresGFCF - Dwellings 
 
   
 
Box 1: 

Sweden’s competitiveness in brief 

Sweden  needs  to  cultivate  its  competitive  edge.  Sweden  performs  well  in  the  areas  of 
innovation, human capital, renewable energy, digitalisation and trade integration. It is also taking 
further  action  to  strengthen  its  performance  in  these  areas.  Sweden’s  labour  productivity  (as 
expressed in GDP per person employed) was the sixth highest in the EU in 2022 (see also Annex 
12).  

However, competitiveness challenges remain, four of which are set out in the bullet points below.  

•  High real-estate valuations and private debt reduce the resilience of the Swedish 

economy and hold back both productive investments and labour mobility. 

• 

Further efforts are needed to increase the use of renewable energy sources to 
reach the EU 2030 targets. 

•  Deteriorating educational outcomes, particularly for disadvantaged groups, are 

negatively affecting future skills development and competitiveness. 

•  Disadvantaged groups require more support to get the right skills for entering 
the  labour  market,  which  would  address  labour  shortages  and  improve  labour 
productivity. 

downturn, but also risking a slower adjustment 
to  structural  changes  that  occur 
in  the 
economy.  

fiscal 

fiscal 

space 

stance 

needs 

Public  finances  remain  strong,  with 
to  address 
sufficient 
public 
for 
medium-term 
investment.  Sweden’s 
is 
expected to turn mildly expansionary in 2024, 
due  to:  (i)  cyclical  revenue  weakness;  (ii)  a 
reduction  in  certain  taxes,  such  as  on  energy; 
and (iii) expenditure measures to both address 
the  economic  impact  of  inflation  on  regional 
government  finances  and  strengthen  military 
defence. In 2025, the fiscal stance is expected 
to  be  contractionary  under  an  assumption  of 
unchanged policies. Sweden’s public debt ratio 
is expected to stabilise at around 30% of GDP 
in 2024 and 2025. 

is  an  established 

(GDP  per  hour  worked, 

Sweden 
innovation 
leader,  but  higher  productivity  growth  is 
needed to support its competitiveness. At 
116% of the EU-27 aggregate in 2022, labour 
productivity 
in 
Purchasing Power Standard) in Sweden is well 
above  the  EU  weighted  average.  Business 
sector  R&D  expenditure  has  been  consistently 
high, and Swedish firms were leading in the EU 
in  developing  new  products,  processes,  and 
services  in  2021.  The  country  also  provides  a 
conducive business environment for firms and 

to 
and 

thanks 
efficiency 

its  very  strong 
entrepreneurs 
business 
infrastructure. 
Nevertheless,  productivity  growth  has  been 
declining 
in  recent  years,  with  an  OECD 
analysis (2) highlighting limited labour mobility 
due  to  shortages  in  affordable  housing  and 
low-skilled 
the 
workers into the labour market.  

integration  of 

insufficient 

to 

continues 

Sweden 
experience 
vulnerabilities  related  to  high  levels  of 
private  debt  and  steeply  valued  real 
estate.  The  European  Commission  undertook 
an in-depth review of the Swedish economy as 
imbalance 
the  macroeconomic 
part  of 
procedure  (MIP)  earlier  in  2024.  This  in-depth 
review found that real-estate prices in Sweden 
have consistently risen faster than income and 
rents  over  the  past  decade,  primarily  due  to 
declining  interest  rates,  low  taxes  on  housing 
and on debt-financing and a poorly functioning 
rental market. These price increases have been 
accompanied  by  a  rise  in  private  debt,  which 
has  increased  the  exposure  of  the  Swedish 
economy 
in  monetary  and 
financing  conditions.  The  rapid  increase  in 
interest  rates  since  the  second  quarter  of 
2022  affected  property  prices  and  directly 
impacted  the  debt-service  burden  of  both 

to  changes 

(2)  OECD (2023), Going for Growth 

3 

 
 
 
households  and 
companies (3). 

commercial 

real-estate 

Towards sustainable and inclusive 
prosperity – tapping Sweden’s full 
potential 

For Sweden to achieve its full potential, it 
will  have  to  make  ambitious  reforms. 
Sweden  has  traditionally  been  a  leader  in 
green  growth,  digitalisation,  and  educational 
performance.  It  has  managed  to  achieve  all 
this  while  strengthening 
its  sustainable 
competitiveness.  Continued  reform  efforts  in 
the  following  three  policy  areas  could  further 
improve Sweden’s sustainable competitiveness 
and  foster  prosperity:  (i)  the  housing  market; 
(ii) inclusive education and an inclusive labour 
market; and (iii)climate policy. 

investment  and 
It  also  makes  private 
consumption more volatile. Moreover, the high 
allocation of financial resources to real estate 
risks  diverting  capital  away  from  productive 
investments,  which  weighs  on  the  country’s 
economic  performance  in  the  longer  run.  In 
addition, labour mobility is stifled through the 
lock-in  effects 
the  housing  market, 
reflecting  a  poorly  functioning  rental  market 
and  house  prices  that  still  appear  overvalued. 
There are several measures that Sweden could 
take  to  address  these  concerns  including:  (i) 
reducing  the  tax  bias  that  currently  favours 
debt-financed 
(ii) 
increasing  the  level  of  recurrent  property 
taxation; and (iii) reforming the rental market. 

acquisition; 

housing 

in 

Improving  educational  performance  and 
strengthening  upskilling  would  increase 
the  potential  of  Swedish  workers. 
Although Sweden performs slightly better than 
the  EU  average,  underperformance  in  basic 
skills  has  significantly  increased  since  2018, 

Box 2: 

UN Sustainable Development Goals (SDGs) 

Sweden performs better than the EU average on most of the SDGs. However, it needs 
to  step  up  efforts  in  several  areas.  Sweden  performs  well  on  most  of  the  SDG  indicators 
related  to  environmental  sustainability  (SDGs  2,  6,  7,  9,  13,  15).  It  is  also  making  progress  on 
SDGs  related  to  fairness  (SDGs  3,  4,  7,  8,  10),  macroeconomic  stability  (SDGs  8  and  17)  and 
productivity (SDGs 4, 8, 9). However, Sweden is declining on indicators related to poverty (SDG 1), 
gender  equality  (SDG  5),  sustainable  cities  and  communities  (SDG  11)  and  peace,  justice  and 
strong institutions (SDG 16) (see Annex 1).  

Out of the 17 indicators, Sweden remains below the EU average in 3 SDGs. These relate 
to  reduced  inequalities  (SDG  10),  responsible  consumption  and  production  (SDG  12)  and  life 
below  water  (SDG  14).  Despite  some  progress  on  these  targets,  further  efforts  are  needed  to 
catch up with the EU average.  

inhibits 
housing  market 
Sweden’s 
resilience  of  the  economy  to  shocks  and 
weighs  on  productivity.  Increases  in  real-
estate prices above the rate of income growth 
have  gone  hand-in-hand with  higher  levels  of 
private  debt.  High  levels  of  debt,  in  particular 
in  combination  with  short  periods  over  which 
mortgages  are  fixed  (Swedish  households 
typically ‘fix’ their mortgage rates for less than 
2  years,  at  the  end  of  which  they  need  to  fix 
their  rates  again), 
leaves  private  actors 
vulnerable  to  changes  in  financing  conditions. 

(3)  SWD(2024) 85 final, In-depth review for Sweden.. 

putting the country’s existing advantage in this 
area  at  risk.  Many  students  fail  to  qualify  for 
upper  secondary  general  and  vocational 
education. Achieving better results would go a 
long  way  to  achieving  the  full  potential  of 
Swedish  young  people,  thereby  alleviating the 
shortages  of  skilled  workers 
that  have 
persisted  in  several  sectors  like  healthcare, 
engineering. 
or  mechanical 
education, 
Furthermore,  it  would  help  ensure  to  supply 
more technicians needed across sectors. 

4 

 
 
 
 
Reducing  climate  ambition  increases  the 
future costs of climate action. Sweden had 
an  ambitious  climate  agenda  that  offered  a 
clear  path  to  climate  neutrality.  It  also  had  a 
lead  in  green  growth,  but  this  year’s  changes 
to  its  climate  policy  increase  uncertainty  for 
consumers  and  investors.  In  particular,  it  is 
unclear  how  the  Swedish transport  sector  will 
be able to play a key role in achieving climate 
targets.  Policy  challenges  remain  for  Sweden 
to  make  greater  use  of  renewable  resources, 
increase  electrification,  and  ensure  sufficient 
grid capacity. 

5 

 
IMPLEMENTATION OF KEY REFORMS AND 
INVESTMENTS USING EU INSTRUMENTS 

Funding from the Recovery and Resilience 
Facility (RRF) and cohesion policy funding 
is  mutually  reinforcing  Sweden’s  efforts 
to  boost  its  competitiveness  and  foster 
In  addition  to  the 
sustainable  growth. 
EUR 3.4  billion  of  RRF  funding  described  in 
Annex 3, cohesion policy provides Sweden with 
EUR 1.7  billion for  the  2021-2027  period. 
Total  support  from  these  two  instruments 
represents  around  0.94%  of  the  country’s 
2023  GDP,  compared  with  an  EU  average  of 
5.38% of GDP (see Annex 4).  

Under  its  recovery  and  resilience  plan 
(RRP),  Sweden  has  launched  important 
policy  measures  that  are  expected  to 
improve  its  competitiveness.  In  particular, 
the  RRP  contains  significant  reforms  in  the 
areas  of  the  green  transition,  the  housing 
labour  market,  education, 
market, 
healthcare 
laundering. 
Sweden is also undertaking investments in the 
green  and  digital  transition,  education,  elderly 
care and rental housing.  

anti-money 

and 

the 

resilience  plan 

The implementation of Sweden’s recovery 
and 
is  significantly 
delayed.  Sweden  has  not  submitted  any 
payment requests so far. 

Cohesion  policy  funding  helps  tackling 
Sweden’s  growth  and  competitiveness 
challenges  and  reducing  the  country’s 
territorial and social disparities. Under the 
2014-2020  cohesion  programming  period, 
support focused on research and development, 
skills  development,  and  business  support.  For 
the  current  2021-2027  programming  period, 
support  is  aimed  at  the  green  and  digital 
transition and contributing to the development 
of  a  new  competitive,  innovative  and  export-
oriented growth model. 

Fuelling the green transition 

The Swedish RRP is focused on the green 
transition,  with  specific  reforms  and 
investments  primarily  targeting  carbon-
intensive  sectors.  The  RRP  focuses  mainly 
on  expanding  renewable  energy  capacity, 
decarbonising  industry  (Industry  Leap)  and 
transport,  and  improving  energy  efficiency. 
Sweden’s  Climate  Leap  investment  scheme  is 
ongoing  and  should  accelerate  the  green 
transformation  of  the  economy.  The  scheme 
finances local and regional activities to reduce 
emissions  of  carbon  dioxide  and  other 
greenhouse  gases  affecting  the  climate.  The 
entry  into  force  of  laws  ending  both  the 
reduction  in  energy  tax  on  fuel  and  adjusted 
taxable  benefit  rates  for  company  cars  will 
also help drive the transformation. 

Cohesion policy funding is also supporting 
the  green  transition.  The  Just  Transition 
Fund  (JTF)  is  complementing  the  RRP-funded 
measures  (such  as  Sweden’s  Industry  Leap), 
by  focusing  on  helping  heavy  industries  (such 
as  steel,  metal,  and  cement  companies)  in 
their transformation towards carbon neutrality. 
It  is  expected  that  investments  under  the  JTF 
will  contribute  to  a  decrease  of  around  3 
million  tonnes  of  CO2  eq./year  in  Sweden  in 
2029.  

Connecting people and 
accelerating the digital 
transformation 

Making  effective  use  of  various  funding 
is  helping  to  accelerate  the 
sources 
digital  transition,  with  a  lasting  impact 
on  the  Swedish  economy.  Under  the  RRP, 

6 

 
 
and 

reliable 

more  than  94 000  buildings  are  reported  to 
have  already  received  support  since  2021  for 
broadband  expansion,  and  more  buildings 
should be connected every year up until 2025. 
broadband 
High-speed 
connectivity, especially in less populated areas, 
support  territorial  cohesion.  The  RRP  will 
accelerate  the  deployment  of  e-government 
solutions  in  Sweden  by  allocating  substantial 
funds  to  develop  a  joint  digital  infrastructure 
for 
improving 
interoperability  and  data  exchange.  SMEs  will 
improved  digital 
also  benefit  from 
infrastructure  and  connectivity.  At  the  same 
time,  the  European  Regional  Development 
Fund (ERDF), will help more than 16 500 SMEs 
to boost their digitalisation. This is expected to 
promote 
increase 
competitiveness.  

innovation  and 

administration, 

public 

thus 

this 

Building the foundations for a 
better housing market 

existing 

Sweden’s  RRP  is  helping  to  partially 
macroeconomic 
address 
vulnerabilities in the housing market and 
private debt. The RRP focuses on the supply 
side  of  the  housing  issue.  The  stock  of  rental 
increased  with 
and  student  housing  has 
support  from  subsidies  for  new,  energy-
efficient dwellings. Legal changes entered into 
force  in  2021  to  shorten  the  time  it  takes  to 
complete zoning plans. The RRP contains plans 
to ensure that more opportunities are given to 
stakeholders  like  property  owners,  developers 
or  builders  to  create  and  partly  develop 
detailed zoning plans. Specific amendments to 
the Planning and Building Act in 2022 have led 
to  better  standards  in  housing  construction, 

which should accelerate permitting procedures 
for  construction.  Additional 
reforms  are 
planned, one of the most significant being the 
introduction of a simplified and more efficient 
regulatory  framework  for  building  permits, 
which is expected to be gradually implemented 
from 2023 onwards.  

Strengthening education and skills 

to 

the  RRP, 

The  RRF  and  cohesion  policy  funds  are 
supporting  measures  to  tackle  education 
and  skills  gaps.  Under 
the 
establish 
legislation  was  amended 
economic incentives for municipalities to offer 
training  courses 
that  combine  vocational 
training  in  healthcare  and  social  care  with 
Swedish  language  training.  In  line  with  this 
amended  legislation,  the  RRF  has  contributed 
to  financing  more  than  68 000  new  study 
places in regional adult vocational education in 
2020-2022.  The  scheme  was  continued  in 
2023.  Activities  to  scale  up  the  number  of 
study  places  at  universities  and  other  higher 
education  institutions  were  in  progress  in 
2023.  The  RRF-supported  measures  in  this 
area  are  complemented  by  funding  from  the 
ERDF,  European  Social  Fund  Plus  (ESF+)  and 
the  JTF,  all  three  of  which  support  skills 
development  and  the  integration  of  people 
into  the  labour  market.  The  measures  are 
expected  to  further 
increase  the  already 
achieved 2030 national skills and employment 
targets (of 60% adults participating in training 
every year and 82% of the population aged 20 
to 64 being in employment). 

Box 3: 

Combined action for more impactful EU funds 

To  boost  economic  growth  and  maximise  the  impact  of  EU  funding,  Sweden’s  RRP  includes 
reforms that support investments under other EU instruments, creating significant synergies and 
complementarities  between  the  various  funds.  For  example,  the  Swedish  RRP  contains  an 
ambitious  reform  of  employment  law  with  the  objective  of:  (i)  fostering  lifelong  learning;  (ii) 
making it easier for people to switch jobs; and (iii) making it easier for people without experience 
to get a job. The reform is complemented by the ESF+, which will further help Sweden to reap 
the benefits of this reform under the RRP. The ESF+ provides support to integrate unemployed 
people  into  the  labour  market.  Similarly,  the  ESF+  will  also  support  lifelong  learning  for  those 
already employed, allowing workers to adapt to the changing labour market. 

7 

 
 
 
Increasing the resilience of the 
healthcare sector 

The  RRP  includes  measures  to  increase 
the  accessibility,  capacity  and  resilience 
of  Sweden’s  healthcare  and  long-term 
care  systems.  The  RRF  provides  funding  to 
municipalities  for  Sweden’s 
‘Elderly  Care 
Initiative’,  thanks  to  which  more  than  10  000 
employees  working  in  elderly  care  are  given 
training to improve their skills. The investment 
started  in  2020  and  continued  throughout 
2023.  Making  the  healthcare  system  more 
resilient is part of a broad plan to upgrade the 
Swedish healthcare system.  

The REPower EU chapter 

the  authorisation  process 

The  RRP  now  also  includes  a  REPowerEU 
chapter,  the  main  objectives  of  which  are:  (i) 
to  facilitate  the  green  transition  by  speeding 
up 
the 
construction  of  electricity  grids;  and  (ii)  to 
in  energy-
further  scale  up 
efficient  housing.  This  will  not  only  promote 
energy  efficiency  but  also  help  to  address 
persistent housing needs.  

investments 

for 

8 

 
 
FURTHER PRIORITIES AHEAD 

faces  additional 

Sweden 
challenges 
related  to  the  housing  market,  meeting 
climate  targets  and  human  capital. 
Tackling  these  challenges  will  help  increase 
Sweden’s 
long-term  competitiveness  and 
ensure  the  resilience  of  its  economy.  It  will 
also help the country to make further progress 
in achieving the SDGs. 

to 

was 

imbalance 

the 
The  policy  assessment  under 
macroeconomic 
procedure 
suggests  that  policy  progress  by  Sweden 
has been limited (4). Policy action in the past 
years 
tightening 
limited 
macroprudential  regulation  and  some  supply-
side  measures  of  limited  scope  and  impact. 
The most significant challenge at this juncture 
is  for  Sweden  to  avoid  a  renewed  surge  in 
debt-financed  housing  acquisition,  while 
simultaneously  avoiding 
risk  of  an 
uncontrolled unwinding of existing imbalances. 
Making  it  cheaper  for  mortgage  borrowers  to 
lengthen  the  period  of  time  over  which  their 
interest  rates  are  fixed  could  help  to  make 
interest-fixation  periods  longer  and  cushion 
the  impact  of  interest-rate  movements  on 
household budgets. 

the 

is 

important  that  the 

identified 
It 
challenges  are  addressed  at  both  the 
national  and  regional  level  to  reduce 
regional disparities and improve administrative 
and  investment  capacity  in  a  balanced  way 
across the country. 

A more resilient economy requires 
an ambitious agenda for housing 
reform 

Sweden continues to face macroeconomic 
vulnerabilities  related  to  real  estate  and 
high levels of private debt (5). 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 
have corrected in the past 2 years, as interest 
rates rose significantly, but they still appear to 
be overvalued.  

of 
the 
vulnerabilities. 

Limited steps have been taken to address 
identified 
the 
drivers 
macroeconomic 
Policy 
action  to  address  these  vulnerabilities  was 
limited  to  raising  the  counter-cyclical  capital 
buffer (announced already in 2022) and some 
supply-side  measures  (e.g.  easing  permitting 
procedures  in  2022  and  2023)  of  which  the 
impact  cannot  yet  be  judged.  Maintaining 
predictable  rules  in  the  housing  market  is 
essential,  but  currently  there  are  no  changes 
planned for the tax system, which continues to 
favour  home  ownership  through  low  levels  of 
recurrent  property  taxation  and  generous  tax 
interest 
deductibility 
payments (6).  The  rental  market  has  seen 
limited  reform  in  recent  years  and  average 
rents  are  still  well  below  ‘market’  rents,  as 
only  newly  built  rental  buildings  can  charge 
market rents. 

mortgage 

of 

(4)  SWD(2024) 85 final, In-depth review for Sweden. 

(5)  European Commission, In-depth review for Sweden, 

2024, Commission staff working document SWD(2024) 
85 final. 

(6)  See, for instance, European Commission, In-depth 

review for Sweden, 2022, Commission staff working 
document SWD(2022) 639 final. 

9 

 
 
 
 
High  levels  of  private  debt  are  linked  to 
investments  in  the  real-estate  sector, 
which  weigh  on  Swedish  productivity. 
Around four fifths of all bank loans in Sweden 
are  related  to  the  real-estate  sector,  in  the 
form  of  mortgages  or  loans  to  commercial 
real-estate 
tenant-owner 
companies, 
associations,  and  construction  companies (7). 
Although  the  financial  sector  is  sound  with 
risk  metrics,  close  monitoring  of 
solid 
commercial 
real-estate  companies  seems 
advisable  given  the  often  highly  leveraged 
balance  sheets  of  these  companies.  High 
levels  of  capital  allocation  to  residential  and 
commercial  real  estate  could  well  weigh  on 
total productivity growth, both because: (i) the 
construction  sector  has  seen  relatively  low 
productivity growth; and (ii) housing assets do 
not generate innovations through investments 
intellectual  property  or 
in  the  way  that 
machinery investments do. 

in 

the 

Economic 

described 

A  more  resilient  economy  requires  an 
ambitious  agenda  for  housing-market 
reform. High levels of indebtedness, favoured 
by  the  tax  system,  leave  the  private  sector 
vulnerable  to  changes  in  financing  conditions 
and 
(as 
Employment  snapshot).  Reducing  the  tax  bias 
in  Sweden,  which  currently  favours  debt-
financed  housing  acquisition, 
is  therefore 
important  to  incentivise  investments  in  more 
productive  assets.  Moreover, 
the  poorly 
functioning housing market – and in particular 
the  poorly  functioning  rental  market  –  risks 
reducing labour mobility across the country (8). 
There  is  a  risk  that  more  productive  and 
talented  people  may  not  accept  job  offers  at 
the most productive firms because of a lack of 
affordable  housing  in  the  area  to  which  they 
might  move.  This  is  a  particularly  acute 
problem  for  the  green  industrial  transition  in 
the north of Sweden.  

(7)  European Commission, In-depth review for Sweden, 

2023, Commission staff working document SWD(2023) 
644 final 

(8)  OECD Going for Growth: 529a9160-en.pdf (oecd-

ilibrary.org)  

10 

More ambition would help Sweden 
to reach its 2030 climate targets 

Sweden risks missing key emissions goals 
by  2030.  National  climate  targets,  initially 
more  ambitious  than  the  EU  ones,  are  at  risk 
of  being  missed.    In  particular,  due  to  policy 
changes,  notably  the  lowering  of  blending 
requirements for biofuel in gasoline and diesel 
as of January 2024, Sweden is now projected 
to fall short of its 2030 targets for reductions 
in greenhouse-gas emissions in transport. 

overall 

emissions-reduction 

Emission  reductions  in  road  transport 
have  long  been  identified  as  key  if 
Sweden  is to  achieve  its  climate targets. 
Road  transport  accounts  for  three quarters  of 
energy demand for oil and petroleum products, 
which are the main source of greenhouse-gas 
emissions 
in  Sweden  from  fossil  fuels. 
Therefore, reducing greenhouse-gas emissions 
in  transport  is  crucial  if  Sweden  is  to  achieve 
its 
targets. 
Swedish climate policy recognised this key role 
of road transport when setting a national goal 
in 2017 of reducing greenhouse-gas emissions 
from  transport  by  70%  between  2010  and 
2030.  The  emissions  reductions  necessary  to 
reach  the  2030  target  had  initially  been 
expected  to  follow  mainly  from:  (i)  step-by-
step  increases  in  minimum  requirements  for 
the blending of biofuels in diesel and gas (the 
so-called  reduction  obligation);  (ii)  increased 
electrification  of  the  car  fleet;  (iii)  increased 
energy  taxes;  and  (iv)  a  bonus/malus  system 
for cars, reflecting their environmental burden.  

to 

led 

in  emissions.  Against 

However,  policy  choices  to  counter  high 
fewer 
energy  prices  have 
reductions 
the 
background of large increases in energy prices 
the 
in  2023, 
reduction  obligation  was 
amended 
in  January  2024,  substantially 
reducing  the  obligation  to  blend  biofuel  into 
diesel and petrol. On top of the changes in the 
reduction  obligation,  2024  also  saw:  a 
reduction  in  fuel  taxes;  the  extension  of  fuel-
tax  exemptions;  and  the  scrapping  of  the 
bonus system for the purchase of electric cars. 
These policy changes imply significantly higher 
liquid-fuel  consumption  and  thus  greater 

 
 
greenhouse-gas  emissions  from 
than previously projected.  

transport 

for 

targets 

climate 

Sweden’s 
the 
reduction of greenhouse-gas emissions in 
2030  are  now  unlikely  to  be  reached. 
Estimating the  precise gap  between  Sweden’s 
likely  2030  emissions  based  on  current policy 
its  2030  EU  targets  for  emissions 
and 
following  these  policy  changes  is  difficult  in 
the  absence  of  updated  comprehensive 
scenarios  for  greenhouse-gas  emissions  that 
reflect  recent  policy  measures.  The  currently 
available  government  climate  action  plan 
focuses  on  a  longer  horizon  until  2045,  but 
this  action  plan  does  not  contain  quantitative 
scenarios  on  emissions  trajectories  for  the 
period  to  2030 (9).  Several  studies  from  a 
range of government and independent bodies, 
including  the  Climate  Policy  Council,  the 
Swedish Environmental  Protection Agency, the 
National  Institute  for  Economic  Research,  the 
Fiscal Policy Council, and the Swedish National 
Road and Transport Research Institute have all 
presented  assessments,  distributional  effects, 
and  alternative trajectories  for  emissions that 
contain  estimated  impacts  from  the  recent 
road 
changes 
transport (10).  While  these  scenarios  all  have 
different  assumptions  and  focuses,  they  do 
seem to confirm that current policies are likely 
to result in a significant shortfall compared to 
the  EU’s  2030  greenhouse-gas  emission 
targets (11).  

notably 

policy, 

for 

in 

(9)  Regeringens skrivelse 2023/24:59. Regeringsens 
klimathandlingsplan – hela vägen till netto noll. 

(10)  Climate Policy Council, Yearly report 21 March 2024. 

Swedish Environmental Portection Agency 
(Naturvårdsverket), Naturvårdsverkets underlag till 
regeringens klimatredovisning 2024. National Institute 
for Economic Research (NIESR), Miljö, ekonomi och 
politik 2023: fördelningseffeter av miljö och 
klimatpolitik, december 2023. NIESR, reduktionsplikten 
och dieselpriset, NIESR Specialstudier November 2023. 
Swedish Fiscal Policy Council (Finanspolitiska Rådet), 
Finanspolitiska rådets rapport 2024 chapter 6.  Swedish 
National Road and Transport Research Institute (VTI), 
Fördelningseffekter av bilstyrmedel för att nå 
klimatmålet 2030 En analys av inkomst- och geografisk 
dimension, VTI rapport 1192.  

(11)  According to a preliminary assessment by the Climate 
Policy Council of December 2023, the shortfall in 
carbon dioxide emission savings might be around 5 to 9 
million tonnes (around 10 to 20% of current total 

will 

require 

Increased  electrification  of  industry  and 
transport 
sufficient 
electricity supply, ideally from renewable 
sources. Even though Sweden has the highest 
share of renewables in its energy consumption 
in the EU, it is also among the Member States 
with  the  highest  energy  consumption  per 
capita. The ongoing electrification of industries 
in  the  south  of  Sweden,  combined  with 
innovative,  green  industrial  developments  and 
decarbonisation in the north of Sweden, (such 
as in the iron and steel industry) require even 
greater electricity production. In addition, more 
electricity  will also be required for the further 
electrification of road transport.  

Sweden  still  has  untapped  potential  for 
renewable  energy.  Sweden  aims  to  develop 
13 GW  of  wind  capacity  and  about  5 GW  of 
solar power capacity between 2021 and 2030 
(see  Annex  7  on  Energy).  A  combination  of 
factors  is  holding  back  the  originally  planned 
expansion of renewable  energy production. Of 
these  factors,  permitting  barriers  (where  the 
authorities do not allow projects to go ahead) 
have  been  particularly  detrimental  to  the 
expansion  of  both  offshore  and  onshore  wind 
power.  These  barriers  to  development  of 
renewable  energy  are  partly  the  result  of 
inefficient  permitting  procedures  and  veto 
rights  held  by  local  government  and  defence 
authorities.  

shortages. 

Expanding grid capacity will help mitigate 
energy-supply 
Structural 
in  power  generation  and  grid 
constraints 
capacity,  especially  in  the  south  of  Sweden, 
lead  to  increased  costs  for  households  and 
businesses.  There  is  still  excess  electricity 
supply  in  the  north  of  the  country.  The  extent 
to  which  this  excess  could  alleviate  supply 
shortages  in  the  south  is  limited,  as  the 
capacity. 
transmission 
Furthermore,  with  the  expected  expansion  of 
energy-intensive  innovative  industries  in  the 
north,  the  excess  supply  of  electricity  in  this 
northern region can be expected to decrease in 
in 
the 

future.  Nevertheless, 

investment 

system 

lacks 

Swedish emissions), see: 
https://via.tt.se/pressmeddelande/3403796/handlingspl
anen-otillracklig-ytterligare-styrmedel-behovs-for-att-
na-klimatmalen?publisherId=3236239&lang=sv. 

11 

 
 
 
 
expanding  and  upgrading energy-transmission 
networks  would  make  it  possible  to  alleviate 
the current shortage of electricity and enable a 
better distribution of electricity across regions. 
The  Swedish  REPowerEU  chapter  in  the  RRP 
includes  a  reform  aiming  at  speeding  up  the 
authorisation  process  for  upgrades  to  the 
electricity  grid.  In  addition,  action  needs to  be 
taken  to  speed  up  the  acquisition  of  skills  by 
Swedish  workers.  This  would  help  Sweden  to 
meet  the  broad  challenges  in  the  field  of 
education discussed below. 

Improving labour market 
integration by tackling education 
and skills gaps 

shortages 

competitiveness 

risk  undermining 
Labour 
Sweden’s  ability  to  further  improve  its 
sustainable 
and 
highlight the need for Sweden to upgrade 
workers’  skills  and  improve  educational 
outcomes.  While  the  share  of  early  leavers 
from  education  and  training  is  below  the  EU 
average,  wide  gaps  remain  between  different 
groups  in  educational  attainment  and  skills 
levels.  These  gaps  are  most  pronounced  for 
young  people  born  outside  the  EU,  who  are 
less likely to have completed upper secondary 
school  and  less  likely  to  be  in  employment, 
education  or  training  than  those  born  in 
Sweden (see Annex 14). This not only makes it 
difficult  for  people  in  this  group  to  find 
employment,  but  also  harms  Swedish 
competitiveness  more  broadly.  Education  and 
skills  gaps  compound  labour  shortages  which 
remain  acute,  especially  in  the  industry  and 
services  sectors.  These  labour  shortages  pose 
a  major  challenge  for  the  development  and 
the green industrial transition of the country’s 
northernmost regions (see Annex 17).  

EU  is  above  the  EU  average.  Improving  the 
levels  of  educational  attainment  and  skills 
could  help  address  poverty  rates 
in  the 
medium term and would also help Sweden to 
its  national  2030  poverty-reduction 
reach 
target. 

the 

share 

where 

Deteriorating  basic  skills  and  teacher 
shortages are putting the Swedish school 
system  under  pressure.  The  basic  skills  of 
Swedish  students  have  deteriorated  since 
2018,  with  the  largest  deterioration  being  in 
of 
mathematics, 
underperformers  has  increased  by  8.4  pps  to 
27%. While this is below the EU average, it is 
still  well  above  the  EU  target  of  keeping  the 
number  of  underperformers  to  no  more  than 
15%  of 
the 
persistent shortage of qualified teachers risks 
further impacting the quality of the education 
system and the performance of students. The 
extent 
varies 
considerably  across  the  country,  from  region 
to  region,  from  municipality  to  municipality 
and between types of school (see Annex 15). 

students (12).  Furthermore, 

shortages 

teacher 

of 

results. 

educational 

socioeconomic 

Disadvantaged 
and 
migrant  backgrounds  negatively  impact 
students’ 
The 
underperformance  rate  has  increased  further 
since  2018  for  students  from  disadvantaged 
socioeconomic  backgrounds,  and  the  gap 
between  native-born  students  and  those  with 
a  migrant  background 
is  very  high.  The 
Swedish school system tends to be segregated 
along  two  lines:  socioeconomic  background 
and migrant background. These two categories 
also  reflect  the  neighbourhoods  where  the 
students live (13).  The mastering of Swedish is 
also  an  important  determinant  of  student 
performance.  

in  a  disadvantaged 
Many  students 
position 
for  upper 
secondary  education, which  reduces  their 

to  qualify 

fail 

Lower  levels  of  educational  attainment 
and  skills  reduce  employability  and  can 
also increase the risk of poverty. In 2022, 
the share of people at risk of poverty or social 
exclusion  (AROPE)  increased  to  the  highest 
figure  ever  recorded  for  Sweden  since  2015. 
Moreover, the AROPE gap between those born 
in  the  country  and  those  born  outside  of  the 

(12)  Based on the 2022 OECD Programme for International 

Student Assessment (PISA) survey. 

(13)https://www.regeringen.se/contentassets/fcf0e59defe04
870a39239f5bda331f4/en-mer-likvardig-skola--
minskad-skolsegregation-och-forbattrad-
resurstilldelning-sou-202028/  

12 

 
 
Box 4: 

The mid-term review of cohesion policy funding for Sweden 

The  mid-term  review  of  cohesion  policy  funds  is  an  opportunity  to  assess  cohesion  policy 
programmes  and  to  tackle  emerging  needs  and  challenges  in  EU  Member  States  and  their 
regions. Member States are reviewing each programme taking into account, among other things, 
the  challenges  identified  in  the  European  Semester,  including  in  the  2024  country-specific 
recommendations.  This  review  forms  the  basis  for  a  proposal  by  each  Member  State  for  the 
definitive allocation of 15% of the EU funding included in each programme. 

Sweden  has  made  progress  in  the  implementation  of  cohesion  policy  programmes  and  the 
European  Pillar  of  Social  Rights,  but  challenges  remain  as  outlined  in  this  report  (see,  for 
instance,  Annexes  14  and  17).  Most  importantly,  there  are  still  disparities  in  GDP  growth, 
productivity  and  innovation  between  the  Swedish  regions.  Therefore,  faster  implementation  of 
existing plans is needed in both: (i) innovation contributing to the further greening of society with 
the ambition of reaching a climate-neutral economy, while continuing to address socioeconomic 
regional  disparities  and  disparities  between  urban  and  non-urban  areas;  and  (ii)  upskilling  and 
reskilling,  with  particular  attention  to  vulnerable  groups,  in  particular  those  with  a  migrant 
background. 

Sweden also stands to benefit from the opportunities provided by the Strategic Technologies for 
Europe Platform initiative (STEP) (16) to boost investments in technologies supporting the green 
transition.  STEP  could  support  the  development  and  production  of  clean  and  resource-efficient 
technologies  by  ensuring  the  availability  of  critical  inputs  and  addressing  shortages  in  skills. 
These are particularly important for SMEs in lagging regions. 

chances  to  enter  further  education.  In 
2022,  15%  of  all  students  finishing  lower 
secondary  school  had  grades  that  were  too 
low  or 
incomplete,  excluding  them  from 
qualifying  for  upper  secondary  school.  For 
those  that  get  a  ‘fail  grade’  in  half  of  all 
compulsory  school  subjects  or  in  any  of  the 
core  school  subjects  of  Swedish,  English  and 
mathematics, 
introductory 
so-called 
programmes  aim  at  allowing  them  to  later 
enrol  into  upper  secondary  school,  including 
vocational, training. However, the success rate 
of  these  programmes  is  relatively  low (14).  As 
in  Sweden  require  an  upper 
most 
secondary  or  higher  qualification, 
this 
increases  the  risk  of  not  finding  a  job,  with 
negative 
integration. 
Students in a disadvantaged  position are also 
underrepresented 
independent  schools, 
whose  pupils  have  on  average  better  chances 
of  qualifying  for  further  studies.  Analyses 
suggest  that,  to  some  extent,  independent 
schools  tend  to  give  disproportionally  higher 

consequences 

jobs 

for 

in 

grades  than  municipal  ones (15).  That,  in  turn, 
further 
allows 
education  more  easily,  regardless  of  their 
objective educational attainment.  

their  students 

to  enter 

Upskilling and reskilling Swedish workers 
could  increase  their  chances  of  finding  a 
job.  Sweden  has  been  making  good  progress 
on  upskilling  and  reskilling  workers in  energy-
intensive  industries  and  transforming  sectors, 
with  a  visible  increase  in  participation  in 
learning activities in recent years. Furthermore, 
Sweden  currently  has  one  of  the  highest 
upskilling  rates  in  preparing  workers  for  the 
green  transition  in  the  EU  (see  Annex  8). 
Strengthening  this  momentum  and  ensuring 
that  more  people  are  able  to  find  jobs  in  the 
green  economy  will  make  it  easier  for  people 
to find work and change jobs. 

(14)  National Agency for Education (2019), 

Introduktionsprogram, eleverna och deras sysselsättning 
efteråt, Skolverket, Stockholm, 
https://www.skolverket.se/getFile?file=4855. 

(15)https://www.skolverket.se/download/18.72b8d67c18e11

125c6368/1709738385056/pdf12579.pdf; 
https://www.skolverket.se/getFile?file=11810 

(16)  Regulation (EU) 2024/795  

13 

 
 
 
 
disabilities, 
measures; 

through 

focused 

policy 

•  Improving 

by: 

improving 

attainment 
educational 
levels  and  employment  prospects, 
the 
(i) 
particularly 
educational  performance  of  students  from 
disadvantaged  socioeconomic  or  migrant 
backgrounds;  (ii)  increasing  the  number  of 
such  students  that  qualify  for  upper 
secondary  school;  and  (iii)  addressing  the 
persistent shortage of qualified teachers; 

•  Further decarbonising  the  economy  by: 
(i)  removing  capacity  constraints  in  the 
electricity  grid through further investments 
to accommodate the increasing deployment 
of  renewable  energy;  and  (ii)  streamlining 
and  accelerating  permitting  procedures  for 
renewables, thereby  contributing  to  further 
electrification; 

•  Reducing  greenhouse-gas  emissions  in 
transport  by  introducing  targeted  policy 
measures  to  help  achieve  Sweden’s  2030 
emission reduction targets. 

KEY FINDINGS 

Sweden’s  recovery  and  resilience  plan 
includes measures to address a series of 
structural  challenges,  in  synergy  with 
other EU funds, by: 

the  green 
investment 
of 

•  Accelerating 
transition 
in 
the 
through: 
(i) 
decarbonisation 
emission-intensive 
industries to increase their competitiveness; 
and  (ii)  incentivising  regional  and  local 
initiatives  to  help  reduce  greenhouse-gas 
emissions; 

•  Advancing  the  digital  transition  by 
making  broadband 
connectivity  more 
accessible  and  setting  up  a  shared  digital 
infrastructure for public administration; 

•  Improving 

the 

resilience  of 

the 
healthcare  sector  by  removing  existing 
constraints  to  improve  the  accessibility, 
capacity  and  resilience  of  the  systems  for 
healthcare and long-term care. 

The implementation of Sweden’s recovery 
and  resilience  plan  is  facing  significant 
delays  which  require  decisive  actions  to 
ensure a successful implementation of all the 
measures of Sweden’s recovery and resilience 
plan by August 2026. 

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

•  Addressing 

macroeconomic 
vulnerabilities  related  to  the  housing 
market and household debt, fostered by 
tax incentives and a suboptimal functioning 
of  the  rental  market,  both  of  which  are 
exacerbated  by  a  mismatch  between 
housing supply and demand; 

•  Reducing  skills  gaps,  in  particular  for 
people born outside the EU and people with 

14 

 
 
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 – implementation 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy transition and competitiveness 

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 

LIST OF TABLES 

A2.1. 
A3.1. 

Summary table on 2019-2023 CSRs 
Key facts of the Swedish RRP 

17 

19 

19 

21 

25 

27 

30 

32 

32 

36 

42 

45 

45 

47 

50 

52 

56 

58 

58 

60 

62 

64 

67 

67 

69 

72 

73 

22 
25 

 
 
 
Support from EU instruments in Sweden 
Resilience indices across dimensions for Sweden and the EU-27 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
Key Energy Indicators 
Key indicators for a fair transition in Sweden 
Circularity indicators 

A3.2.  Measures in Sweden's RRP 
A4.1. 
A5.1. 
A6.1. 
A7.1. 
A8.1. 
A9.1. 
A10.1.  Key Digital Decade targets monitored by the Digital Economy and Society Index 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 regional level in Sweden 
A18.1.  Financial Stability 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 

LIST OF GRAPHS 

Progress towards the SDGs in Sweden 
Sweden's progress on the 2019-2023 CSRs (2024 European Semester) 
Total grants disbursed under the RRF 
Distribution of cohesion policy funding across policy objectives in Sweden 
Distribution of RRF funding by pillar in Sweden 
Greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2022 
Changes in livestock density and organic farming 
Environmental investment gap, annual average 
Sweden's energy retail prices for households and industry 
Trends in electricity prices for non-household consumers (EU and foreign partners) 
Sweden’s installed renewable capacity (left) and electricity generation mix (right) 
Fair transition challenges in Sweden 
Job vacancy rate in transforming sectors and mining and quarrying 
ETS emissions by sector since 2013 
Treatment of municipal waste 

A1.1. 
A2.1. 
A3.1. 
A4.1. 
A4.2. 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2. 
A7.3. 
A8.1. 
A8.2. 
A9.1. 
A9.2. 
A11.1.  R&D intensity (gross domestic expenditure on R&D as % of GDP) 2010-2022 
A12.1.  Labour productivity 
A12.2.  Material shortages 
A13.1.  Government effectiveness 
A15.1.  Underachievement in mathematics in Sweden by country of birth, PISA 2022 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2024-2070 
A17.1.  Average GDP per capita growth vs GDP per capita in 2011 
A17.2.  Real labour productivity in Sweden, 2000-2022 
A19.1.  Tax wedge for single and second earners as a % of total labour costs, 2023 
A19.2.  Tax revenues from different tax types, % of total revenue 

LIST OF MAPS 

A17.1.  Sweden: Regional Competitiveness Index 2022 - Innovation sub-index 

18 

26 
29 
30 
34 
41 
42 
46 
48 
50 
55 
56 
58 
59 
60 
62 
64 
68 
70 
72 
75 
75 

19 
21 
25 
28 
28 
32 
34 
34 
36 
37 
38 
42 
43 
45 
46 
50 
52 
54 
56 
60 
62 
62 
64 
64 
70 
70 

65 

 
 
 
 
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, 13, 15), but is 
moving  away  from  SDG 11  and  needs  to 
catch  up  with  the  EU  average  on  others 
(SDGs 12 and 14). Sweden performs very well on 

to 

final 

energy 

in  gross 

SDG 13 (Climate action), with net greenhouse gas 
emissions  falling  from  1.0  tonnes  per  capita  in 
2017  to  0.6  tonnes  in  2022,  well  below  the  EU 
average  (7.3  tonnes  in  2022).  The  share  of 
renewable 
energy 
consumption  (SDG 7)  increased  from  53.4%  in 
2017  to  66%  in  2022,  significantly  above the  EU 
average  (23%  in  2022).  As  concerns  SDG 9 
(Industry,  innovation  and  infrastructure),  Sweden 
scores  above  the  EU  average  on  all  indicators. 
Gross  domestic  expenditure  on  R&D  further 
increased from 3.36% of GDP in 2017 to 3.40% of 
GDP  in  2022.  The  circular  material  use  rate 
(SDG 12) further decreased, from 6.7% in 2017 to 
6.1%  in  2022,  markedly  below  the  EU  average 
(11.5%  in  2022).  On  SDG 14  (Life  below  water), 
Sweden  is  performing  well  below  the  EU  average 
on  certain  indicators.  Furthermore,  Sweden  is 
for  SDG 
moving  away 
11 (Sustainable  cities  and  communities),  with  the 
recycling rate of municipal waste decreasing from 
46.8% in 2017 to 39.7% in 2022. Measures in the 
Swedish recovery and resilience plan (RRP) support 

targets 

from 

the 

Graph A1.1: Progress towards the SDGs in Sweden 

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). 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 25 April 2024. Data refer mainly to the period 2017-2022 or 2018-2023. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

19 

 
 
 
 
 
 
 
 
debt 

gross 

government 

Sweden  performs  well  on  most  SDG 
indicators related to macroeconomic stability 
(SDGs 8  and  17)  and  is  improving  on  others 
(SDG  16).  Sweden  performs  well  on  SDG 8, 
having  increased  its  share  of  GDP  allocated  for 
investment from 25.2% in 2018 to 26.7% in 2023 
(EU  average:  22.7%  in  2023).  Furthermore,  the 
general 
(SDG 17) 
decreased  from  39.6%  of  GDP  in  2018  to  31.2% 
in 2023, significantly lower than the EU average of 
81.7% of GDP in 2023. On SDG 16 (Peace, justice 
and  strong  institutions),  Sweden  performs  above 
the  EU  average  for  most  indicators,  but  certain 
indicators  related  to  peace  and  personal  security 
are  on  a  negative  trajectory.  On  the  other  hand, 
the  share  of  the  population  who  perceive  the 
independence  of  the  justice  system  to  be  very  or 
fairly  good  is  high  at  75%  in  2023  (EU  average: 
53% in 2023). The RRP aims to help preserve the 
sustainability of the Swedish economic model, and 
therefore  contributes  to  macroeconomic  stability 
through reforms tackling 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. 

the acceleration of the green transition of carbon-
intensive sectors such as transport and industry. 

(Reduced 

inequalities), 

Sweden  performs  well  on  most  SDG 
indicators related to fairness (SDGs 3, 4, 7, 8, 
10)  but  is  moving  away  from  the  SDGs  on 
others  (SDGs  1 and  5).  Sweden  has  one  of  the 
highest  employment  rates  in  the  EU  (SDG  8; 
82.6% in 2023; EU average: 75.3%) and continues 
to  perform  above  the  EU  average  on  most 
indicators for SDG 3 (Good health and well-being). 
On  SDG 10 
the  gap 
between  EU  and  non-EU  citizens  in  terms  of 
employment  rates  has  decreased  (from  32%  in 
2018  to  19.9%  in  2023)  but  remains  wide 
compared to the EU average (13.2% in 2023). The 
share of early leavers from education and training 
(SDG 4) decreased from 7.5% in 2018 to 7.4% in 
2023 and remains below the EU average (9.5% in 
2023).  On  SDGs 1  (No  poverty)  and  5  (Gender 
equality),  several  indicators  have  been  on  a 
negative  trajectory.  However,  on  most  indicators 
Sweden  still  overall  performs  better  than  the  EU 
average.  The  Swedish  RRP  includes  measures  to 
increase the number of study places in universities 
and other higher education institutions, as well as 
in  higher  vocational  education  and  training  at 
upper secondary level. 

Sweden  performs  well  on  SDG  indicators 
related  to  productivity 
(SDGs 4,  8,  9).  
Sweden’s  share  of  gross domestic expenditure  on 
R&D  (SDG 9)  remains  high,  increasing  between 
2017  and  2022  (from  3.36%  to  3.40%  of  GDP), 
and well above the EU average (2.24% of GDP in 
2022).  Furthermore,  the  share  of  young  people 
(aged  15  to  29)  neither  in  employment  nor  in 
education  and  training  (SDG 8)  decreased  from 
6.5% in 2018 to 5.7% in 2023, well below the EU 
average  of  11.2%  in  2023.  On  SDG 4  (Quality 
education),  Sweden  performs  well  on  adult 
participation 
learning  (38.8%;  EU  average: 
12.7%  in  2023),  has  a  high  tertiary  attainment 
rate (54.1% vs the EU average of 43.1% in 2023) 
and  a  high  share  of  adults  with  at  least  basic 
digital skills (66.4% in 2023). 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 other higher 
education 
institutions.  The  RRP  also  provides 
funding for investment in broadband expansion. 

in 

20 

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

The Commission has assessed the 2019-2023 
country-specific  recommendations  (CSRs) (17) 
addressed to Sweden as part of the European 
Semester.  These  recommendations  concern  a 
wide  range  of  policy  areas  that  are  related  to  14 
of  the  17  Sustainable  Development  Goals  (SDGs) 
(see  Annexes  1  and  3). The  assessment  considers 
the policy action taken by Sweden to date (18) and 
the  commitments  in  its  recovery  and  resilience 
plan 
RRP 
implementation,  65%  of  the  CSRs  focusing  on 
structural  issues  from  2019-2023  have  recorded 
at  least  ‘some  progress’,  while  35%  recorded 
‘limited progress’ or ‘no progress’ (see Graph A2.1). 
As  the  RRP  is  implemented  further,  considerable 
progress in addressing structural CSRs is expected 
in the coming years. 

(RRP) (19). 

stage 

this 

At 

of 

Graph A2.1: Sweden's progress on the 2019-2023 
CSRs (2024 European Semester) 

Source: European Commission. 

(17)  2023 CSRs: EUR-Lex - 32023H0901(27) - EN - EUR-Lex 

(europa.eu) 

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) 

(18)  Including policy action reported in the national reform 

programme and in Recovery and Resilience Facility (RRF) 
reporting (published twice a year, reporting on progress in 
implementing milestones and targets on the basis of the 
payment requests assessment). 

(19)  Member States were asked to effectively address in their 
RRPs all or a significant subset of the relevant country-
specific recommendations issued by the Council. 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 have not yet been 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. 

21 

No progress7%Limited progress28%Some progress30%Substantial progress23%Full implementation12% 
 
 
      
 
 
 
Table A2.1:  Summary table on 2019-2023 CSRs 

(Continued on the next page) 

22 

SwedenAssessment in May 2024*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.Limited 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 innovationSubstantial 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,Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024 and 2025SDG 7, 9, 13high-tech and innovative sectors, Substantial 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, 16 
 
 
  
 
Table (continued) 

(Continued on the next page) 

23 

2021 CSR 1Not relevant anymoreIn2022,maintainasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilienceFacility,andpreservenationallyfinancedinvestment.Not relevant anymoreNot applicableSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainabilityinthemedium term.Not relevant anymoreNot applicableSDG 8, 16Atthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupporting the green and digital transition.Not relevant anymoreNot applicableSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacy and sustainability of health and social protection systems for all.Not relevant anymoreNot applicableSDG 8, 162022 CSR 1Some ProgressIn2023,ensurethatthegrowthofnationallyfinancedprimarycurrentexpenditureisinlinewithanoverallneutralpolicystance,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadyto adjust current spending to the evolving situation. Substantial ProgressNot applicableSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguse of the Recovery and Resilience Facility and other Union funds. Substantial 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 4 Some ProgressReduce overall reliance on fossil fuels Limited 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. Some ProgressRelevant measures planned as of 2025SDG 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. 
 
 
  
 
Table (continued) 

Note: 
* See footnote (19). 
** RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the 
RRP may be 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 

2023 CSR 1 Some ProgressWinddowntheemergencyenergysupportmeasuresinforce,assoonaspossiblein2023and2024.Shouldrenewedenergypriceincreasesnecessitateneworcontinuedsupportmeasures,ensurethatthesearetargetedatprotectingvulnerablehouseholdsandfirms,fiscallyaffordable,and preserve incentives for energy savings.Substantial ProgressSDG 8, 16While maintaining a sound fiscal position in 2024,Full ImplementationSDG 8, 16preservenationallyfinancedpublicinvestmentandensuretheeffectiveabsorptionofRRFgrantsandotherEUfunds,inparticulartofosterthegreen and digital transitions.Full ImplementationSDG 8, 16Fortheperiodbeyond2024,continuetopursueinvestmentandreformsconducivetohighersustainablegrowthandpreserveaprudentmedium-termfiscal position.Full ImplementationSDG 8, 16Reducerisksrelatedtohighhouseholddebtandhousingmarketimbalancesbyreducingthetaxdeductibilityofmortgageinterestpaymentsand/orincreasingrecurrentpropertytaxes,whileestablishingadequatetoolsforbetter policy assessment and targeting.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, 10, 12Improvetheefficiencyofthehousingmarket,includingbyintroducingreforms to the rental marketLimited ProgressSDG 8, 10, 122023 CSR 2ProceedwiththesteadyimplementationofitsrecoveryandresilienceplanandswiftlyfinalisetheREPowerEUchapterwithaviewtorapidlystartingitsimplementation.Proceedwiththespeedyimplementationofcohesionpolicyprogrammes,inclosecomplementarityandsynergywiththerecoveryandresilience plan.2023 CSR 3Limited ProgressImproveeducationaloutcomesforpupilswithdisadvantagedsocio-economicandmigrantbackgroundsbyensuringequalaccessopportunitiesintheschooling system and addressing the shortages of qualified teachers.Limited ProgressRelevant RRP measures planned as of 2021, 2022, 2023 and 2024SDG 4, 10Developtheskillsofdisadvantagedgroups,particularlypeoplewithmigrantbackgrounds,byadaptingresourcesandmethodstotheirneeds,withaviewto helping them integrate into the labour market.Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023 and 2024SDG 4, 8, 102023 CSR 4Limited ProgressReduce reliance on fossil fuelsLimited ProgressRelevant measures planned as of 2021SDG 7, 9, 13byacceleratingthedeploymentofrenewables,includingbyexpandingandupgrading energy transmission networks,Some ProgressRelevant measures planned as of 2025SDG 7, 9, 13introducingreformstosimplifyandspeedupadministrativeandpermittingprocedures,Some ProgressRelevant measures planned as of 2025SDG 7, 9, 13improving energy efficiency andSome ProgressRelevant RRP measures planned as of 2021, 2022, 2023 and 2025SDG 7, 9, 13steppinguppolicyeffortsaimedattheprovisionandacquisitionofskillsandcompetences needed for the green transition.Some ProgressSDG 4, 7, 13RRP implementation is monitored through the assessment of RRP payment requests and analysis of the bi-annual reporting on the achievement of the milestones and targets, to be reflected in the country reports. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union. 
 
  
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN – IMPLEMENTATION 

Table A3.1:  Key facts of the Swedish RRP 

Source: RRF Scoreboard 

The  plan  has  a  strong  focus  on  the  green 
the 
transition,  dedicating  43.65%  of 
available  funds  to  measures  that  support 
climate  objectives  and  21.2%  of  its  total 
allocation to support the digital transition. It 
also  retains a strong social dimension with social 
protection  measures, 
in  particular 
vocational  education,  Swedish  language  training 
and  student housing.   

including 

Graph A3.1: Total grants disbursed under the RRF 

Note: This graph displays the amount of grants, including pre-
financing,  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 

This  Annex  provides  a  snapshot  of  Sweden’s 
implementation of its recovery and resilience 
plan  (RRP),  past  the  mid-way  point  of  the 
Recovery  and  Resilience  Facility’s 
(RRF) 
lifetime.  The  RRF  has  proven  central  to  the  EU’s 
recovery  from  the  COVID-19  pandemic,  helping 
speed  up  the  twin  green  and  digital  transition, 
while  adapting  to  geopolitical  and  economic 
resilience 
developments, 
against  future  shocks.  The  RRF  is  also  helping 
implement the UN Sustainable Development Goals 
and 
country-specific 
recommendations (see Annex 2).   

strengthening 

address 

and 

the 

The  RRP  paves  the  way  for  disbursing  up  to 
EUR 3.45 billion in grants under the RRF over 
the  2021-2026  period, representing  0.6% of 
Sweden’s GDP (20). As of mid-May 2024, Sweden 
still has its full RRF allocation available, which will 
be disbursed upon assessment of future fulfilment 
of  the  57  milestones  and  targets (21)  included  in 
the Council Implementing Decision (22) (CID), ahead 
of the 2026 deadline established for the Facility.   

Sweden’s  progress  in  implementing  its  plan 
is  recorded  in  the  Recovery  and  Resilience 
Scoreboard (23).  The 
scoreboard  gives  an 
overview  of  the  progress  made  in  implementing 
the  RRF  as  a  whole.  The  graph  and  tables  below 
show the current state of play as reflected in the 
scoreboard. 

Sweden’s RRP includes a REPowerEU chapter 
to phase out its dependency on Russian fossil 
fuels,  diversify 
its  energy  supplies,  and 
produce  more  clean  energy  in  the  coming 
years. The chapter will  contribute to ensuring the 
supply  of  affordable,  secure,  and  sustainable 
energy. 

(20)  GDP information is based on 2023 data. Source: 

https://ec.europa.eu/economy_finance/recovery-and-
resilience-scoreboard/index.html?lang=en   

(21)  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.  

(22)  https://data.consilium.europa.eu/doc/document/ST-7772-

2022-ADD-1/en/pdf  

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

resilience-scoreboard/country_overview.html 

25 

Initial plan CID adoption date4 May 2022Scope Revised plan with REPowerEU chapterLast major revision9 November 2023Total allocation EUR 3.4 billion in grants  (0.6% of 2023 GDP)Investments and reforms 14 investments and 16 reforms Total number of milestones and targets57Fulfilled milestones and targets0 (0% of total)EUR 0billion (0%)Total allocation: EUR 3.45billion 
 
 
 
  
 
 
  
 
 
 
 
 
 
With  a  significantly  delayed  implementation 
of  its  RRP,  Sweden  is  working  towards  its 
first  payment  request  as  of  15  May  2024. 
Table A3.2 highlights some relevant measures that 
will be implemented before 2026 to keep making 
Sweden’s economy greener, more digital, inclusive, 
and resilient.  

Table A3.2:  Measures in Sweden's RRP 

Source: FENIX 

26 

Upcoming reforms and investments• More efficient digital services at public administration bodies• Investments in innovative R&D projects aimed at reducing industrial emissions• Funding for the protection of biodiversity 
 
   
 
 
 
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

more  than  890  projects  supported  by  the  ESF  in 
Sweden.  These  measures  supported  the  thematic 
objectives  of 
the  Swedish  ESF  programme: 
promoting  sustainable  employment  and  mobility; 
promoting social inclusion, combating poverty and 
discrimination;  and  investing  in  education  and 
training for lifelong learning. 

for 

In  the  current  programming  period  (2021-
2027),  cohesion  policy will  provide a  further 
boost  to  Sweden’s  competitiveness,  to  the 
green  transition  and  to  social  cohesion, 
improving  the  living  and  working  conditions 
of  Sweden’s  people.  In  2021-2027,  under  the 
Smarter  Europe  objective,  with  funding  from  the 
ERDF amounting to EUR 574 million, 16 581 SMEs 
are planned to be supported via grants or financial 
instruments. These investments will strengthen the 
research  and  demand-driven 
conditions 
innovation, 
for 
opportunities 
create 
support  digitalisation, 
entrepreneurship,  and 
internationalisation  and  competitiveness.  This  is 
expected to lead to, for example, 3 136 businesses 
cooperating with research organisations and 3 730 
SMEs  introducing  product  or  process  innovation. 
The  Just  Transition  Fund  (JTF),  with  an  allocation 
of EUR 156 million, will focus on helping the steel 
industry  in  Norrbotten,  the  metal  industry  in 
Västerbotten,  and  the  cement  industry  on  the 
island  of  Gotland  during 
industrial 
transformation  towards  carbon  neutrality.  These 
investments  are  expected  to  contribute  to  a 
decrease  of  3 041  554  tonnes  of  CO2  eq./year in 
2029. The ESF+ • 
In  2021-2027,  the  ESF+ 
will contribute to increased employment and skills 
development  in  Sweden,  with  a  total  budget  of 
around 1,6 billion euros. 136 projects have already 
been  approved,  with  approximately  129  000 
planned participants in these projects. Some of the 
main areas of ESF+ support in Sweden will include 
increasing  the  opportunities  for  an  inclusive  and 
sustainable  working  life  for  everyone,  increasing 
the  opportunity  for  work,  reducing  the  risk  of 
economic vulnerability, and social innovation. With 
this work, cohesion policy substantially contributes 
to  achieving  the  UN  Sustainable  Development 
Goals  (SDGs)  in  Sweden,  in  particular  SDG  9 
infrastructure),  SDG  8 
(Industry, 
(Decent  work  and  economic  growth)  and  SDG  1 
(No poverty). 

innovation, 

their 

EU funding instruments provide considerable 
resources for recovery and growth to the EU 
Member States. In addition to the EUR 3.4 billion 
of  Recovery  and  Resilience  Facility  (RRF)  funding 
described in Annex 3, EU cohesion policy funds (24) 
provide  EUR  1.7  billion  to  Sweden  for  the  2021-
2027  period (25).  Support 
two 
instruments combined represents around 0.94% of 
the country’s GDP, compared to the EU average of 
5.38%  of  GDP (26).  Cohesion  policy  supports 
regional  development,  economic,  social  and 
territorial 
competitiveness 
through  long-term  investment  in  line  with  EU 
priorities and with national and regional strategies. 

convergence  and 

these 

from 

During  the  2014-2020  programming  period, 
cohesion  policy  funds  boosted  Sweden's 
competitiveness, with  tangible achievements 
notably  in  research  and  development,  skills 
development and business support. By the end 
of  the  eligibility  period  in  December  2023,  2014-
2020 cohesion policy funds (27) had made EUR 2.1 
billion  available  to  Sweden (28),  of  which  EUR  1.1 
billion has been disbursed since March 2020, when 
the  COVID-19  pandemic  began (29).  The  React-EU 
programme  helped  mitigate  the  impact  of  the 
pandemic,  including  through  skills  development 
and  business  support.  The  achievements  of  the 
European Regional Development Fund (ERDF) over 
the programming period included action to support 
to  4 211  new  businesses  and  create  12 183  new 
jobs  (full-time  equivalents).  The  ERDF  has  also 
supported 
research 
the  cooperation  between 
institutions  and  3 264  SMEs.  During  the  same 
period,  over  582  200  participants  took  part  in 

(24)  In 2021-2027, cohesion policy funds include the European 
Regional Development Fund, the European Social Fund Plus 
and the Just Transition Fund. 

(25)  European territorial cooperation (ETC) programmes are 
excluded from the figure. In 2021-2027, the total 
investment, including national financing, amounts to 
EUR 4 billion.  

(26)  RRF funding includes both grants and loans, where 

applicable. The EU average is calculated for cohesion policy 
funds excluding ETC programmes. GDP figures are based on 
Eurostat data for 2022. 

(27)  In 2014-2020, cohesion policy funds included the European 
Regional Development Fund and the European Social Fund. 
REACT-EU allocations are included but ETC programmes are 
excluded. 

(28)  In 2014-2020, the total investment, including national 

financing, amounted to EUR 3.8 billion.  

(29) Cut-off date: 14 May 2024. 

27 

 
 
 
 
 
Graph A4.1: Distribution of cohesion policy funding 
across policy objectives in Sweden 

Graph A4.2: Distribution of RRF funding by pillar in 
Sweden 

Source: European Commission 

Through combined action, cohesion policy and 
the recovery and resilience plan (RRP) have a 
mutually  reinforcing  impact  in  Sweden.  For 
instance,  the  ERDF  supports  SMEs  in  their  early 
stages of development which have a potential for 
to 
growth  and  for  significantly  contributing 
environmental and climate benefits via a financial 
instrument,  while 
the  RRP  supports  climate 
investment 
in  the  private  sector,  under  the 
schemes  referred  to  as  the  industry  leap  and  the 
climate  leap.  These schemes  involve  projects that 
develop  or  implement  new  technology  with  zero, 
low or negative greenhouse gas emissions. Also in 
relation  to  the  green  transition,  the  JTF invests in 
measures  to  boost  the  capacity  of  the  electricity 
grid 
in  order  to  strengthen  the 
electricity  network  for  the  green  transition.  This 
occurs in complementarity with the RRP reform on 
shortening  the  permitting  process  for  electricity 
grid  construction.  Together,  cohesion  policy  and 
the  RRP  also  help  modernise  the  labour  market. 
The  ERDF  and  JTF  support  skills  development  for 
smart 
and 
industrial 
the  ESF+  helps  with 
integrating  people  into  the  labour  market  and 
lifelong learning, and the Swedish RRP contains an 
employment  protection  act  that  aims  to  promote 
lifelong 
transition 
and 
possibilities.  The  contribution  of  cohesion  policy 
and  the  RRP  funding  by  policy  objective 
is 
illustrated by Graphs A4.1 and A4.2. 

specialisation, 
transition, 

entrepreneurship 

in  Gotland 

increase 

learning 

(1) Each RRP measure helps achieve the aims of two of the 
six policy pillars of the RRF. The primary contribution is shown 
in the outer circle while the secondary contribution is shown in 
the inner circle. Each contribution represents 100% of the RRF 
funds. Therefore, the total contribution to all pillars displayed 
on this chart amounts to 200% of the RRF funds allocated to 
Sweden. 
Source: European Commission 

The Technical Support Instrument (TSI) helps 
Sweden  invest  in  its  public  administration 
and create a better enabling environment for 
EU  and  national  investment.  The  TSI  has 
funded  projects 
to  design  and 
in  Sweden 
implement growth-enhancing reforms since 2018. 
The  support  provided  in  2023  included  action  to: 
its  system  for  multi-level  skills 
i) strengthen 
governance; ii) improve the tax-gap estimations by 
implement 
the  relevant  state  authorities; 
reforms 
‘shadow 
to  combating 
the 
economy’  phenomenon;  and 
transition  to  climate  neutrality  in  Upper  Norrland. 
The  TSI  also  helps  Sweden  implement  specific 
reforms and investments included in its RRP, such 
as the reform of the public employment service. 

the 
iv) advance 

related 

iii) 

Sweden  also  received  funding  from  several  other 
EU  instruments,  including  those  listed  in  Table 
A4.1. 

28 

PO1 Smarter EuropePO2 Greener EuropePO3 Connected EuropePO4 Social EuropePO8 JTF specific objectiveGreen transitionDigital transformationSmart, sustainable and inclusivegrowthSocial & territorial cohesionHealth & resilienceNext generation 
     
   
Table A4.1:  Support from EU instruments in Sweden 

(1) RRF implementation period is 2021-2026. 
(2) The public sector loan facility’s programming period is 2021-2025 and the amount reflects the national share in its grant 
component reserved until the end of the period.   
(3) Common agricultural policy programming periods are 2014-2022 and 2023-2027.   
(4) EMFF – European Maritime and Fisheries Fund, EMFAF – European Maritime, Fisheries and Aquaculture Fund. 
(5) Data on the Connecting Europe Facility covers transport and energy and has a cut-off date of 15 May 2024. 
(6) Data on Horizon Europe (2021-2027) has a cut-off date of 13 May 2024. 
(7) 2021-2027 data on the LIFE programme has a cut-off date of 15 May 2024. 
(8) The amount of the EU guarantee signed under the EFSI Infrastructure and Innovation Window was derived based on the 
signed amount of the operations and the average internal multiplier, as reported by the EIB (cut-off date is 31 December 2023). 
(9) The amount of the EU guarantee and of the volume of operations signed under InvestEU includes the EU compartment as well 
as the Member State compartments (cut-off date is 31 December 2023). 
Source: European Commission 

29 

Amount 2021-2027 (EUR million)Cohesion policy1 725.0RRF grants (1)3 445.7Public sector loan facility (grant component) (2)11.8Common agricultural policy (3)4 521.0EMFF/EMFAF (4)115.9Connecting Europe Facility (5) 365.7Horizon 2020 / Horizon Europe (6)1 079.2LIFE programme (7) 204.7Volume of operations (EUR million)European Fund for Strategic Investment 2015-2020 (8)2 996.1InvestEU 2021-2027 (9) 883.08 400.0EU grantsAmount 2014-2020 (EUR million)2 109.1--1 013.5 298.0120.2 411.12 319.6 101.2EU guaranteesEU Guarantee (EUR million) 
 
  
 
ANNEX 5: RESILIENCE 

Table A5.1:  Resilience indices across dimensions for Sweden and the EU-27 

(1) The synthetic indices aggregate the relative resilience situation of countries across all indicators considered. For an indicator, 
each country’s relative situation in the latest available year is compared with the collection of values of that indicator for all 
Member States and all years in the reference period. 
Source: Resilience Dashboards - version spring 2024, data up to 2022 

This  Annex  uses  the  Commission’s  resilience 
(RDB) (30)  to  show  Sweden’s 
dashboards 
relative 
and 
resilience 
vulnerabilities (31)  that  may  be  of  relevance 
for  societal,  economic,  digital  and  green 
transformations, and for dealing with future 
shocks and geopolitical challenges. (32) 

capacities 

According  to  the  RDB’s  set  of  resilience 
indicators,  Sweden  has  overall  medium-high 
capacities,  and  medium-low  vulnerabilities, 
below  the  EU  average  characterised  by 
medium overall vulnerabilities. Over 50% of its 
vulnerability 
low  or 
medium-low  category,  while  over  60%  of  its 
capacity  indicators  fall  into  the  high  or  medium-
high category. 

indicators  fall 

into  the 

(30)  Https://ec.europa.eu/info/strategy/strategic-

planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en. Resilience is defined as the 
ability not only to withstand and cope with challenges but 
also to undergo transitions, in a sustainable, fair, and 
democratic manner. 2020 Strategic Foresight Report: 
Charting the course towards a more resilient Europe 
(COM(2020) 493). 

(31)  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, 
while capacities refer to enablers or abilities to cope with 
crises and structural changes and to manage transitions. 

(32)  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. 

30 

with 

both 

In  the  social  and  economic  dimension, 
is  above  the  EU 
Sweden’s  performance 
average, 
medium-low 
vulnerabilities  and  high  capacities.  Among  its 
vulnerabilities, it has among the lowest number of 
premature  deaths  due  to  particle  pollution  in  the 
EU and the second lowest number of young people 
neither  in  employment  nor  in  education  and 
training.  Its  capacities  in  most  areas  are  strong. 
Exceptions,  in  the  medium  category,  are  the 
income  stabilisation  coefficient,  the  average  PISA 
score and the impact of social transfers on poverty 
reduction, weaker than in the 2023 RDB. 

and 

capacities 

In the green dimension, Sweden has medium-
high 
medium-low 
vulnerabilities.  Exceptions  to  its  generally  high 
capacities are its medium-low performance in the 
inland  use  of  trains  and  Natura  2000  protected 
areas. 
It  has  medium-low  vulnerabilities  on 
average,  below  the  EU  average,  with  the  lowest 
GHG  emissions  per  capita  and  among  the  lowest 
fatalities  from  extreme  climate  events  in  Europe. 
Its  water  exploitation  and  soil  sealing  indices  are 
its 
also  among 
consumption  footprint  per  capita,  raw  material 
consumption  per  capita  and  waste  generation 
index are above the EU average, giving it medium-
high vulnerabilities in these areas. 

lowest.  However, 

the  EU’s 

the 

digital 

dimension 

In 
Sweden’s 
performance  is  above  the  EU  average,  with 
both  medium-low  vulnerabilities  and  high 
capacities.  It  stands  out for  its  robust  capacities 
in  gross  value  added  of  ICT  and  cybersecurity 
awareness  of  individuals.  Although  it  has  the 

SESEEU-272023 RDB2024 RDB2024 RDBHighMedium-highMediumMedium-lowLowHighMedium-highMediumMedium-lowLowDimensionDistribution of indicators by vulnerabilities and capacitiesOverall resilienceVulnerabilities0.690.680.50Capacities0.760.760.67VulnerabilitiesSocial and economicVulnerabilities0.690.720.47Capacities0.900.890.670.830.850.65GreenVulnerabilities0.720.780.44Capacities0.710.740.70CapacitiesGeopoliticalVulnerabilities0.490.530.41Capacities0.540.590.65DigitalVulnerabilities0.750.740.52Capacities0%20%40%60%80%100%Vulnerabilities(60 indicators)Capacities(63 indicators) 
 
 
 
   
 
 
lowest  vulnerabilities  in  the  EU  measured  by  the 
availability of cloud services and access to digital 
public  services, it  is  amongst  the most  vulnerable 
in ICT trade deficit in services. 

In  the  geopolitical  dimension,  Sweden  has 
maintained  its  medium  vulnerabilities  and 
medium  capacities  as  in  the  2023  RDB. 
Among  its  geopolitical  vulnerabilities,  its  supplier 
concentration  of  energy  carriers  and  base  metals 
are  among  the  highest  in  the  EU.  Medium-high 
vulnerabilities are also found in Sweden’s extra-EU 
export and import partner concentration. However, 
in terms of capacities, compared to the 2023 RDB, 
matters have improved in trade openness towards 
extra-EU  countries  but  also  within  the  EU,  and  in 
total 
the  proportion  of  non-EU  citizens 
employment, in both cases going from medium to 
high. 

in 

31 

 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

Sweden  has  made  progress  in  the  green 
transition,  with  more  action  needed  on 
specifying  the  funding  framework  for  the  climate 
and energy transition, on the circular economy and 
other  areas.  This  Annex  provides  a  snapshot  of 
climate, energy, and environmental aspects of the 
transition in Sweden (33). 

Sweden’s  draft  updated  national  energy  and 
climate  plan  (NECP)  provides  only  partial 
information  on  the  investment  needed  to 
achieve its 2030 climate and energy targets. 
The plan provides estimates of current and future 
investment  in  electricity  generation  (unchanged 
since  the  2019  NECP)  and  transmission  networks 
but  lacks  a  more  comprehensive  assessment  of 
the  investment  needed  to  meet  the  climate 
targets, 
industry  and 
transport.  The  plan  outlines  some  of  the  main 
sources  of  funding  but  does  not  provide  a 
consolidated  overview.  It  is  therefore  not possible 
to identify potential funding gaps (34). 

including  estimates  for 

With  the  policies  and  measures  in  place, 
Sweden  it  is  uncertain  whether  Sweden’s 
2030  effort  sharing  target  will  still  be 
reached (35).  In  2022,  Sweden’s  greenhouse  gas 
emissions  from  the  effort  sharing  sectors  are 
estimated to stand at 36.4% below those of 2005. 
The  country’s  policies  were  projected  to  reduce 
emissions by 61.9% compared to 2005 before the 
reduction obligation was lowered. This would have 
resulted  in  reductions  of  11.9  percentage  points 
beyond  Sweden’s  effort  sharing  target  to  achieve 
a 50% reduction (36). Sweden would have exceeded 

(33)  This Annex is complemented by Annex 7 on energy transition 

and competitiveness, Annex 8 on the fair transition to 
climate neutrality, Annex 9 on resource efficiency, circularity, 
and productivity, and relevant topics in other annexes to this 
country report. 

(34)  See the Commission’s (2023) assessment of the draft 

national energy and climate plan of Sweden.. 

(35)  The national greenhouse gas emission reduction target is 
laid down in Regulation (EU) 2023/857 (the Effort Sharing 
Regulation). The aim is to align action in the sectors 
concerned to meet the EU-level economy-wide target of 
reducing greenhouse gas by at least 55% compared to 1990 
levels. The target also applies to sectors outside the current 
EU Emissions Trading System, notably buildings (heating and 
cooling), road transport, agriculture, waste, and small industry 
(known as the effort sharing sectors).   

(36)  The effort sharing emissions for 2022 are based on 
approximated inventory data. The final data will be 

its effort sharing target but it is unclear whether it 
will  reach  the  target  after  the  changes  to  the 
reduction  obligation.  Sweden  has  committed  to 
achieve climate neutrality by 2045. 

Graph A6.1: Greenhouse gas emissions from the 
effort sharing sectors in Mt CO2eq, 2005-2022 

Source: European Environment Agency 

is  scope  for 

There 
increasing  Sweden’s 
targets  for  renewable  energy  and  energy 
efficiency  in  its  final  updated  NECP (37). 
Currently set at 65% by 2030 in the draft updated 
NECP,  Sweden’s  target  for  renewable  energy  is 
significantly  below  the  required  contribution  of 
76%.  Its  energy  efficiency  contributions  of  40.4 
Mtoe  in  primary  energy  consumption  and  30.11 
Mtoe  in  final  energy  consumption  for  2030  are 
also  less  ambitious  than  those  required  by  the 
Energy Efficiency Directive. 

established in 2027 after a comprehensive review. Sweden’s 
draft updated NECP does not provide emission projections 
for the effort sharing sectors. The information on projections 
of effort sharing emissions “with existing measures” (WEM) 
and “with additional measures” (WAM) is based on the latest 
data that had to be reported by 15 March 2023 under Art. 
18 of Regulation 2018/1999 (the Governance Regulation). 
The projections do not take into account the impact of new 
measures such as changes in biofuel blending requirements. 

(37)  The EU target set out in the revised Renewable Energy 

Directive is to have 42.5% of gross final energy consumption 
coming from renewable energy sources by 2030, with the 
aspiration to reach 45%. The formula in Annex I to Directive 
(EU) 2023/1791 sets the indicative national contribution for 
Sweden at 35.4 Mtoe for primary energy consumption. The 
Commission communicated a corrected national contribution 
of 25.41 Mtoe in final energy consumption for 2030 in 
accordance with Article 4(5) of the Energy Efficiency 
Directive to increase the contribution towards the Union’s 
binding energy efficiency target. See the Commission 
Recommendation of 18.12.2023 to Sweden. 

32 

05101520253035404520052022MtCO2eWasteSmall industryAgricultureBuildings (under ESR)Domestic transport (excl. aviation) 
 
 
 
 
      
 
 
 
Sweden  is  an  EU  frontrunner  in  sustainable 
transport (38). Standing at 6.1% in 2023, Sweden 
has the highest share of battery electric vehicles in 
its  passenger  car  fleet  of  all  EU  countries.  Its 
charging  points 
31 800  publicly  accessible 
provided  one  charging  point  for  every  15  e-
vehicles  in  2023  (below  the  EU  average  of  1:10). 
The  composition  of  road  transport  is  very  similar 
to the EU average, with passenger cars accounting 
for 83 % of distances travelled, and rail and buses 
and coaches together for 15%. On the transport of 
freight,  the  split  between  modes  of  transport  is 
relatively more balanced, with railways accounting 
for 29% and road transport accounting for 71% of 
freight  movements.  75%  of  the  Swedish  rail 
network is electrified.  

Sweden  is  facing  significant  challenges  in 
enhancing  the  carbon-absorbing  capacity  of 
its  land-use  sector,  as  carbon  removals  are 
declining. Sweden is one of the EU Member States 
with  the  highest  net  carbon  removals  through  its 
land use, land-use change, and forestry (LULUCF). 
To  reach  its  2030  LULUCF  target,  additional 
carbon removals of 3 955 kt CO2eq are needed (39). 
According  to  the  latest  projections,  Sweden’s 
carbon removals are expected to fall short of the 
target (40). 

implemented 

Having  broadly 
its  2018 
national  adaptation  strategy,  Sweden  is  set 
to introduce a new strategy this year. Climate 
change will have a significant impact on Sweden’s 
natural  and  built  environment  and  give  rise  to 
major  societal  challenges.  Projected  impacts  and 
challenges  include  landslides  and  erosion,  floods, 
and  water  shortages.  Climate  change  is  also 
expected to considerably impact Sweden’s forests. 
Sweden  has  earmarked  a  budget  for  climate 
adaptation that can be deployed at short notice. It 
has  also  created  an  adaptation 
for 
municipalities  and 
increased  their  funding  to 
prevent  natural  disasters  such  as  landslides  and 
floods.  Despite  stepping  up  its  efforts  on  climate 
adaptation, Sweden’s forestry sector is still facing 

fund 

(38)  Unless otherwise indicated, data in this section refer to 
2021. See European Commission, 2023, EU transport in 
figures, transport.ec.europa.eu. 

(39)  National LULUCF targets of the Member States in line with    

Regulation (EU) 2023/839. 

(40)  Projections submitted in Sweden’s draft updated NECP, 

2023. 

33 

significant challenges due to new risks associated 
with climate change (41). 

There  is  still  room  for  improvement  on 
biodiversity  and  nature  protection  and 
restoration.  At  the  end  of  2021,  15%  of 
Sweden’s land area and 14.9% of its marine area 
was  under  protection (42).  According  to  the  report 
on  the  conservation  status  of  protected  habitats 
and species covered by Article  17 of the Habitats 
Directive,  in  2013-2018,  only  22.6%  of  habitats 
and 47.5% of species reached a good conservation 
status (43). Moreover, conservation status is uneven 
across  groups:  of 
the  33  biogeographical 
assessments  of  the  16  EU  forest  habitat  types 
protected  under  the  EU  nature  directives 
in 
Sweden,  only  6.06%  (two  habitat  types  in  the 
Alpine  region)  have  a  favourable  conservation 
status,  while  all  the  others  have  an  unfavourable 
status (44).  The  common  farmland  bird 
index 
increased  from  81.1  in  2011  to  84.7  in  2018. 
However,  for  bird  species  that  are  dependent  on 
forests, levels are decreasing in Sweden, especially 
for  those  species  linked  to  forests  with  a  more 
complex structure (45). 

Intensive  agriculture  has  a  major  impact  on 
ecosystems,  biodiversity,  soil  health  and  air 
quality. Between 2015 and 2023, the agricultural 
sector’s  annual  economic  output 
fluctuated 
between EUR 5.4 and EUR 6.5 billion (46) and stood 
at EUR 5.9 billion in 2023. Sweden is an EU leader 
on  converting  to  organic  agriculture.  The  share  of 
Sweden’s  utilised  agricultural  area  under  organic 
farming reached 20.2% in 2021. This is more than 
twice  the  EU  average  of  9.1% (47)  and  has  been 
steadily  decreasing  since  2019.  Conservation 
tillage  practices,  which 
increase  soil  organic 
carbon,  covered  23%  of  Sweden’s  tillable  area  in 
2016. According to the impact assessment for the 

(41)  See also the Commission’s 2023 assessment and 
recommendation on Sweden’s progress on climate 
adaptation. 

(42)  A lower share than in the previous year. 

(43)  Versus, respectively, 15% and 28% in the EU.  

(44)  State of Nature Report, EEA 2021. 

(45)  Svensk Fågeltaxering, Övervakning av fåglarnas 
populationsutveckling (Monitoring the population 
development of birds), Årsrapporterna för 2018 and 2021 
(Annual Reports for 2018 and 2021).  

(46)  Production value at basic price (2015=100). 

(47)  In 2020. Data for 2021 are not yet available. 

 
 
 
Food  waste  remains  below  the  EU  average, 
while  composting  and  digestion  levels  could 
be improved. In 2021, Sweden produced 86 kg of 
food waste per person (EU average: 131 kg). Food 
waste was mainly due to household practices. 

Sweden would benefit from investing more in 
measures 
to  protect  biodiversity  and 
ecosystems,  in  the  circular  economy  and  in 
pollution  prevention  and  control.  Between 
2014  and  2020,  the  environmental  investment 
gap  reached  at  least  EUR  6  billion  per  year, 
equivalent  to  1.3%  of  GDP  (EU  average:  0.8%).  
The  gap  is  estimated  to  be  increasing  over  the 
2021-2027  period  and  to  reach  EUR  7  billion  per 
year.  There  remains  opportunity  to 
increase 
for  biodiversity  and 
funding, 
ecosystems  (a  gap  of  EUR  4.4  billion),  pollution 
prevention  and  control  (EUR  1.1  billion),  and  for 
circular economy and waste (EUR 902 million).   

in  particular 

Graph A6.3: Environmental investment gap, annual 
average 

The numbers are computed by the European Commission 
based on the latest internal reports, Eurostat, EIB and national 
data sources. 
Source: European Commission 

Soil  Monitoring Law (48), 5% of Swedish soil  could 
be  considered  as  unhealthy (49).  Soil  erosion 
affects 37% of the country’s cropland area, while 
6%  of  its  peatland  area  is  used  for  agriculture. 
Sweden’s  net  stock  change  of  organic  soils  in 
cropland  and  grassland  areas  has  increased  over 
time, reaching 2 676 kt in 2021 (50). 

Graph A6.2: Changes in livestock density and 
organic farming 

Livestock unit (LSU)/ha of UAA: it measures the stock of 
animals (cattle, sheep, goats, equidae, pigs, poultry and 
rabbits) converted in LSUs per hectare of UAA. 
Source: Eurostat 

Agriculture  remains  a  significant  source  of 
pollution. The latest figures for the gross nitrogen 
balance  on  agricultural  land  in  Sweden  show  a 
nitrogen surplus, with an average nitrogen balance 
of  26.1 kg  of  nitrogen  per  hectare  per  year  in 
2019.  Water  bodies  are  affected  by  pesticide 
contamination and 100% of monitoring sites were 
reported  to  have  pesticide  levels  exceeding  the 
thresholds  set  by  the  Water  Framework  Directive 
in  2020.  However,  no  exceedances  were  reported 
in 2021. 

(48)  SWD 417 final of 05.07.2023  - impact assessment for the 
Directive of the European Parliament and of the Council on 
Soil Monitoring and Resilience (Soil Monitoring Law), (cfr. pg. 
10, pg. 189-190, pg. 835-845).  

(49)  However, not all soil degradation processes could be 

quantified for all land uses. This number simply indicates an 
order of magnitude.  

(50)  FAOSTAT 

34 

012051015202520162020% LSU per hectare% of total utilised agricultural areaLivestock density index Sweden (% LSU per ha)Livestock density index EU-27 (% LSU per ha)Organic farming Sweden (% of total utilised agricultural area)Organic farming EU-27 (% of total utilised agricultural area)4502037664 4901 1315479024 36705001 0001 5002 0002 5003 0003 5004 0004 500Pollution prevention &controlWater managementCircular economy andwasteBiodiversity andecosystemsmillion EUR2014-20202021-2027 
        
 
 
 
        
 
 
 
 
 
 
 
 
Table A6.1:  Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources:  (1)  Member  States’  emission  data  for  2019  and  2020  are  in  global  warming  potential  (GWP)  values  from  the  4th 
Assessment Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ 2005 base year emissions 
under  Regulation  (EU)  2018/842,  emissions  data  for  2021  and  2022,  and  2030  projections  are  in  GWP  values  from  the  5th 
Assessment Report (AR5) of the IPCC. 2021 data are based on the final inventory reports, 2022 data are based on approximated 
inventory reports and European Environmental Agency’s calculation of effort sharing emissions. The final data for 2021 and 2022 
will  be  established  after  a  comprehensive  review  in  2027.  The  2030  target  is  in  percentage  change  of  the  2005  base  year 
emissions. Distance to target is the gap between the 2030 target and projected effort sharing emissions with existing measures 
(WEM) and with additional measures (WAM), in percentage change from the 2005 base year emissions. The measures included 
for  the  2030  emission  projections  reflect  the  state  of  play  as  reported  in  Member  States'  draft  updated  national  energy  and 
climate plans or, if unavailable, as reported by 15 March 2023 as per Regulation 2018/1999. (2) Net removals are expressed in 
negative figures, net emissions in positive figures. Reported data are from the 2024 greenhouse gas inventory submission. 2030 
value  of  net  greenhouse  gas  removals  as  in  Regulation  (EU)  2023/839  –  Annex  IIa.  (3)  The  2030  national  objectives  for 
renewable  energy  and  energy  efficiency  are  indicative  national  contributions,  in  line  with  Regulation  (EU)  2018/1999  (the 
Governance  Regulation),  the  EU-level  2030  renewable  energy  target  set  out  in  Directive  EU/2018/2001  amended  by  Directive 
EU/2023/2413 (the revised Renewable Energy Directive) – 42.5% of gross final energy consumption with the aspiration to reach 
45% –, and the formula in Annex I to Directive (EU) 2023/1791 (the Energy Efficiency Directive). (4) Passenger battery electric 
vehicles (BEV) and fuel cell electric vehicles (FCEV). (5) The climate protection gap refers to the share of non-insured economic 
losses caused by climate-related disasters, based on modelling of the risk from floods, wildfires, windstorms, and the insurance 
penetration rate. Scale: 0 (no protection gap) –4 (very high gap) (European Insurance and Occupational Pensions Authority, 2022). 
(6) Total water consumption in renewable freshwater resources available for a territory and period. (7) Material extractions  for 
consumption and investment. (8) Years of potential life lost through premature death due to exposure to particulate matter with a 
diameter  of  less  than  2.5  micrometres.  (9)  Share  of  habitats  in  good  conservation  status  according  to  the  records  submitted 
under  Art.  17  of  the  Habitats  Directive  (Directive  92/43/EEC)  for  2013-2018.  (10)  Multi-species  index  measuring  changes  in 
population abundances of farmland bird species. (11) Source: annex 12 of the Commission’s proposal for a soil monitoring law, 
SWD (2023) 417 final. (12) Estimates of organic carbon content in arable land. 

35 

Target200520192020202120222030WEMWAMProgress to climate and energy policy targetsGreenhouse gas emission reductions in effort sharing sectors (1)Mt CO2eq, %, pp43 228.5-28%-32%-33%-36%-50%1212Net greenhouse gas removals from LULUCF (2)Kt CO2eq-50 683 -40 513 -43 043-43 591-41 218-47 321n/an/aShare of energy from renewable sources (1) (3)%40%56%60%63%66%76%--Energy efficiency: primary energy consumption (3)Mtoe49.045.841.343.342.535.4Energy efficiency: final energy consumption (3)Mtoe33.231.530.531.731.025.4Projected20182019202020212022202120222030Green transition: mobility         Greenhouse gas emissions: road transportMt CO2e---15.213.6769.0786.66.1Share of zero-emission vehicles in new registrations (4)% 24.39.619.132.8912.1n/aNumber of publicly accessible AC/DC charging points --144501840724352299178446956n/aShare of electrified railways%75.3%75.1%75.0%75.0%-56.1%-n/aGreen transition: buildings         Greenhouse gas emissions: buildingsMt CO2e---2.42.2537.0486.71.0Final energy consumption in buildings2015=100-----104.0%97.2% Climate adaptation         Climate protection gap (5)score 1-4--0.00.81.01.51.5n/a20182019202020212022202020212022State of the environmentWater | Water exploitation index (WEI+) (1) (6)% of renewable freshwater1.00.2---3.6--Circular economy | Material footprint (7)tonnes per person25.124.723.726.326.914.214.814.9Pollution | Years of life lost due to air pollution by PM2.5 (8)per 100.000 inhabitants85513257-545584-Biodiversity | Habitats in good conservation status (9)%22.614.7                       Common farmland bird index (10)2000=100778185--78--Green transition: agri-food sectorOrganic farming% of total utilised agricultural area20.2920.4320.3120.2-9.1--Nitrates in groundwatermg NO3/litre0.350.220.24--20.42--Food waste per capitaKg per capita8986-130131-Share of soil in poor health (11)%541Soil organic matter in agricultural land (12)Mt per ha288----7 904--DistanceEU-27 
 
 
 
 
 
 
       
 
ANNEX 7: ENERGY TRANSITION AND COMPETITIVENESS 

Graph A7.1: Sweden's energy retail prices for 
households and industry 

(1) For industry, consumption bands are I3 for gas and IC for 
electricity, which refer to medium-sized consumers and 
provide an insight into affordability 
(2) For households, the consumption bands are D2 for gas 
and DC for electricity 
(3) Industry prices are shown without VAT and other 
recoverable taxes/levies/fees as non-household consumers 
are usually able to recover VAT and some other taxes 
Source: Eurostat 

have 

consumers 

In  relative  terms,  electricity  prices  for  non-
household 
increased 
significantly  compared  to  the  US  and  Japan 
up  until  the  second  half  of  2022.  However, 
they  have  since  registered  a  sharp  decline,  nearly 
reaching  the  levels  seen  in  the  US  and  Japan  by 
the  second  half  of  2023.  This  shift  indicates  a 
potential 
international 
in 
competitiveness  of  energy-intensive  industries  in 
Sweden. 

rebound 

the 

This  annex  (51)  sets  out  Sweden’s  progress 
and  challenges  in  accelerating  the  net-zero 
energy  transition  while  bolstering  the  EU’s 
competitiveness 
energy 
sector  (52). It considers measures and targets put 
forward in the draft updated National Energy and 
Climate Plan for 2030  (53).  

clean 

the 

in 

energy 

renewable 

Sweden  remains  at  a  high  level  of  energy 
security  and  is  continuing  its  progress  in 
installed 
capacity, 
including  having  the  highest  share  of 
renewable  energy  in  heating  and  cooling  in 
the  EU.  Topics  requiring  further  attention  include 
investments  into  grid  infrastructure  and  network 
capacity,  tapping  into  the  full  potential  of  energy 
efficiency  and  increasing  market  surveillance  on 
products with ecodesign and energy labelling. 

Average 

In  line  with  overall  EU  trends,  Swedish 
average  electricity  prices  for  households 
decreased  by  20%  between  the  second  half 
of  2022  and  the  second  half  of  2023  and 
than  pre-crisis 
were  still  9%  higher 
levels  (54). 
industrial 
consumers dropped  significantly by  41%  between 
2022  and  2023  and  reaching  pre-crisis  levels. 
Sweden’s  industrial  consumers  still  pay  some  of 
the lowest electricity prices in the EU. Sweden has 
the  highest  gas  retail  prices  in  the  EU  for  both 
households  and  industrial  consumers,  but  the 
impact  is  limited  because  gas  plays  only  a  minor 
role in the Swedish energy mix. 

prices 

for 

(51) This annex is complemented by Annex 6 because the 

European Green Deal focuses on the clean energy transition) 
and by Annex 8 on action to protect the most vulnerable 
groups complementing ongoing efforts under the European 
Green Deal, REPowerEU and European Green Deal Industrial 
Plan. 

(52)  In line with the Green Deal Industrial Plan and the Net-Zero 

Industry Act. 

(53)  Sweden submitted its draft updated NECP in July 2023. The 
Commission issued an assessment and country specific 
recommendations on 18 December 2023, Commission 
Recommendation, Assessment (SWD) and Factsheet of the 
draft updated National Energy and Climate Plan of Sweden - 
European Commission (europa.eu). 

(54)  Based on average household electricity prices in 2019-

2020. 

36 

0.000.050.100.150.200.250.300.35€/KWhGas (households) - SEGas (households) - EUElectricity (industry & service) - SEElectricity (industry & service) - EUElectricity (households) - SEElectricity (households) - EU 
 
 
 
     
 
 
Graph A7.2: Trends in electricity prices for non-
household consumers (EU and foreign partners) 

(1) For Eurostat data (EU and SE), the band consumption is ID 
referring to large-sized consumers with an annual 
consumption of between 2 000 MWh and 20 000 MWh, such 
as in electricity intensive manufacturing sectors, and gives an 
insight into international competitiveness  
(2) JP = Japan 
Source: Eurostat, IEA 

There  were  no  interventions  in  price-setting 
for electricity in Sweden. However, the Swedish 
government  has  earmarked  and  allocated 
EUR 6.8 billion  (1.3%  of  GDP  (55)  to  shielding 
households  and  firms  from  the  energy  crisis 
(between  September  2021  and  January  2023). 
Energy  support  to  households  was  allocated  via 
utilities  irrespective  of  whether  they  were  in 
poverty. Municipal services have provided financial 
assistance  to  households  with  difficulties 
in 
sustaining  their  livelihoods  and  reduced  access  to 
the labour market and capacity for work  (56). 

Regarding  consumer  empowerment  in  the 
electricity  and  gas  markets,  Sweden  has 
completed  the  100%  deployment  of  smart 
meters  but  does  not  have  a  national 
framework for energy communities that fully 
reflects  Electricity  Directive  2019/944 (57). 
Sweden  allows  electricity  consumers  to enter into 
flexible  or  dynamic  price  contracts,  and  suppliers 
must offer such contracts if they have more than 

200 000  customers  (58).  In  2022,  around  26%  of 
household  customers  held  fixed-term  contracts 
and 52% held variable ones  (59). Switching rates in 
electricity were around 10% and switching time in 
both electricity and gas was 10 days.  

Sweden  has  a  high  level  of  energy  security, 
largely  due  to  its  low  dependence  on  fossil 
fuels. In 2022, natural gas accounted for only 1% 
of  gross  available  energy  and  0.1%  of  gross 
electricity  generation  (60).  This  low  consumption, 
combined  with  a  diversified  portfolio  of  reliable 
providers  (Denmark,  Finland,  the  Netherlands  and 
Norway)  contributes  to  the  security  of  gas  supply 
of  Sweden.  Following  Russia’s  full-scale  invasion 
of  Ukraine,  Sweden  declared  an  early  warning 
under  the  Gas  Security  of  Supply  Regulation  on 
21 June 2022. Sweden managed to reduce its gas 
demand  between  August  2022  and  December 
2023 by 32% (compared with the average for the 
previous  5 years).  Annual  consumption  amounted 
to 0.7 bcm in 2022 (1.2 bcm in 2021). Sweden has 
one  small  storage  facility 
(Skallen,  9mcm), 
corresponding  to  around  1%  of  its  annual  gas 
consumption in 2022, which is used to meet peak 
demand.  Sweden 
its  gas  storage 
fulfilled 
obligations  last  winter,  reaching  95.3%  by  1 
November  2023,  and  ended  the  winter  season 
with a storage filled at 70.95% by 1 April 2024. 

No  adequacy  issues  were  recorded  for  the 
security of electricity supply during the first 
half  of  2023  according 
to  ENTSO-E 
analysis (61).  Similarly,  no  adequacy  issues  were 
experienced  during  the  winter  of  2023-2024 
thanks  to  higher  filling  levels  of  hydro  reservoirs 
and  higher  than  expected  availability  of  nuclear 
units.  The  filling  level  in  Swedish  reservoirs  was 
80%  by  the  end  of  October  2023,  thanks  to  low 
June-
hydro 
August 2023  and  a  wet  summer.  To  further 
support  the  security  of  electricity  supply,  Sweden 

production 

electricity 

during 

(58)  Energy Retail and Consumer Protection 2023 Market 

Monitoring Report (europa.eu), ACER. 

(55)  Bruegel, 2023, National fiscal policy responses to the 
energy crisis, https://www.bruegel.org/dataset/national-
policies-shield-consumers-rising-energy-prices. This is one of 
the lowest shares of GDP spent on retail price interventions 
by a Member State. 

(59)  No data are available on the remaining types of contracts, 
which were probably of mixed nature, in bundled offers, etc. 
No percentages on contracts in gas market are available 
from the Energy Retail and Consumer Protection 2023 
Market Monitoring Report (europa.eu), ACER. 

(56) Source: the updated Swedish NECP. 

(60)  Eurostat data, 

(57)  Directive (EU) 2019/944 of the European Parliament and of 
the Council of 5 June 2019 on common rules for the internal 
market for electricity. 

https://ec.europa.eu/eurostat/databrowser/view/nrg_bal_s__c
ustom_9376397/default/table?lang=en. 

(61)  ERAA 2023 | ENTSO-E – ERAA 2023 (entsoe.eu).  

37 

050100150200250Index ( 2018 S2 = 100)JPUKUSSEEU 
   
 
 
is  aiming  to  achieve  a  100%  fossil-free  energy 
mix by 2040 (including by improving conditions for 
the deployment of nuclear power).  

Sweden  has  the  highest  share  of  renewable 
energy  in  the  EU  (66%  of  its  gross  final 
energy  consumption 
in  2022).  The  main 
renewable  energy  source  remains  solid  biofuels 
(59%),  followed  by  hydropower  (26%)  and  wind 
(15%)  (62). 
and  solar  power 
In  2023,  total 
renewable energy capacity installed was 40.6 GW 
(a 8% increase on 2022 (63). Hydropower remained 
stable  at  16.4  GW,  while  wind  energy  increased 
14%  y/y  to  16.3  GW  in  2023  (16.1  GW  from 
onshore wind).  The output from solar energy saw 
a  strong  increase  of  46%  in  comparison  to  2022 
to  3.5  GW  in  2023,  whereas  bioenergy  remained 
stable and accounted for 4.5 GW.   

Renewables accounted for 83% of electricity 
in  2022  (64),  with  the  main 
generation 
sources  being  hydropower  (42%)  and  wind 
power  (17%).  Biomass  is  still  an  important 
source of electricity (9%). Solar power is increasing 
but  is  still  a  low  share  (1%).  Nuclear  energy 
constitutes 31% of the electricity mix.  

Graph A7.3: Sweden’s installed renewable capacity 
(left) and electricity generation mix (right) 

(1) "Other" includes solid biofuels, renewable municipal waste 
and biogas  
Source: IRENA, Ember 

As  regards  the  acceleration  of  renewable 
energy  deployment,  Sweden  aims  to  develop 
13 GW  of  wind  capacity  and  about  5 GW  of 
solar  power  capacity  between  2021  and 
2030  (65). 
sustainable 
strategy 

The 

for 

(62)  IEA 2022 statistics by country. 

(63)  IRENA report 2024. 

(64)  SHARES tool, Eurostat. 

development  of  onshore  wind  energy,  which  was 
developed  jointly  by  the  Swedish  Energy  Agency 
and the Swedish Environmental Protection Agency 
in  2021,  outlines  national  development  needs  for 
wind  energy  at  regional  level  and  serves  as  a 
planning  tool.  Sweden  is  a  member  of  the  North 
Sea Energy Cooperation (NSEC)  (66), which focuses 
on  promoting  sources  such  as  offshore  wind 
energy  and  renewable  hydrogen  in  the  context  of 
regional cooperation. Sweden plans to take further 
measures to streamline administrative procedures 
for the uptake of solar energy. The Swedish Energy 
Agency  has  set  up  a  dedicated  contact  point  for 
permitting,  exemption  and  notification  procedures 
linked  to  renewable  energy  (67).  Sweden  has 
introduced 
the 
installation  of  photovoltaic  systems.  An  online 
initiative ‘Solelportalen.se’ has been in place since 
2018.  

to  encourage 

incentives 

tax 

In  the  transport  sector,  the  share  of 
renewable  energy  reached  29%  in  2022 and 
was  projected  to  increase  to  78%  in  2030 
before  the  most  recent  policy  changes. 
Sweden  has  introduced  a  supply  obligation  for 
service  stations  with  sales  of  more 
than 
1 500 m3 of  petrol  or  diesel  to  offer  at  least  one 
type of renewable fuel. In 2018, Sweden also put 
in  place  a  support  scheme  for  an  eco-bonus 
system to shift freight transport from roads to the 
sea.  The  scheme  has  been  extended  to  cover  rail 
transport by 2024. A set of support measures for 
the  uptake  of  electromobility  is  also  in  place. 
recharging 
These 
infrastructure, 
points 
(including  for  light-  and  heavy-duty  vehicles)  and 
recharging  points  for  heavy-duty  vehicles.  On  1 
January  2024,  Sweden  lowered  the  obligation  to 
blend  in  biofuels  and  lowered  fossil  fuel  taxes 
making  it  uncertain  that  the  share  of  renewable 
energy will increase as much as projected earlier. 

concern  electric  vehicles, 

hydrogen-refuelling 

In  2022,  renewable  energy  accounted  for 
69.4%  of  total  energy  use  in  heating  and 
cooling  – the highest share in the EU. Almost 
all of this came fromsolid biofuels (81%) and heat 
pumps (14%). Sweden expects that bioenergy will 

(66) The NSEC member countries are Belgium, Denmark, France, 
Germany, Ireland, Luxembourg, the Netherlands, Norway and 
Sweden. The NSEC supports and facilitates the development 
of the offshore grid and the region’s large renewable energy 
potential. 

(65)  Sweden’s updated draft NECP. 

(67)  https://www.energimyndigheten.se/fornybart/tillstand  

38 

 
 
 
 
remain  dominant  for  heating  and  cooling  in  the 
its  contribution  will 
coming  years,  but  that 
decrease by over 3 TWh between 2021 and 2025 
and fall still further by over 0.5 TWh to 112 TWh in 
2030  (68). 

renewable  generation.  Sweden 

Sweden  continues  to  be  a  net  exporter  of 
electricity, thanks to its substantial installed 
capacities  of  onshore  wind  and  hydro 
reservoir.  Sweden  does  not  have  specific  goals 
for  offshore  wind  but  is  investigating  areas  for 
offshore 
is 
interconnected  with  Denmark,  Finland,  Germany, 
Lithuania,  Poland  and  Norway.  Sweden 
is 
developing projects  of  common interest  (PCIs)  for 
third  and  fourth  electricity  interconnection  lines 
with  Finland  (‘Aurora  Line’  and  ‘Aurora  Line  2’).  
The  two  400 kV  electricity  lines  with  Finland  will 
increase capacity by 1600 MW by 2025 and 2032 
respectively. 

Sweden  requires  new  transmission  grid 
investments  and  renewal  of  extensive  parts 
of  the  existing  transmission  network.  In  its 
2022-2031  network  development  plan,  Svenska 
Kraftnät has identified a need to construct around 
800 km  of  new  transmission  lines  and  25  new 
substations,  and  to  renew  1 700 km  of  lines  and 
largest  network 
45  substations.  Two  of  the 
development  projects  are 
the  West  Coast 
programme  (to  eliminate  bottlenecks  on  the  west 
coast);  and  the  North-South  programme  (with 
around  50  different  projects  to  increase  cross-
zonal  capacity  between  the  SE2  and  SE3  bidding 
zones by 2040). 

Energy  efficiency  gains  have  slowed,  but 
there 
is  still  some  untapped  energy 
efficiency  potential.  In  2022,  Sweden  had 
primary  energy  consumption  of  42.5 Mtoe  (1.8% 
down on 2021 and 10.4% down on 2012). It had 
final  energy  consumption  of  31.0 Mtoe  (2.1% 
down  on  2021  and  4.9%  down  on  2012).  In  the 
last  year,  the  best  results  came  from  the 
residential sector, whose final energy consumption 
decreased  by  10.3%;  and  the  worst  results  came 
from  the  industry  sector,  whose  final  energy 
consumption increased by 0.7%. 

Sweden 
the 
residential  sector’s  positive  contribution  to 

to  maintain 

is  expected 

(68)  Draft updated NECP. 

39 

its  2030  building  energy  consumption 
reduction target. The evolution of its residential 
final energy consumption  (69) has followed a long-
term  downward  trend  (-8%  between  2020  and 
2022),  in  line  with  the  national  targets  set  out  in 
its  long-term  renovation  strategy.  In  accordance 
with  this  strategy,  Sweden  has  implemented  a 
comprehensive  set  of  energy  efficiency  measures 
in  the  building  ecosystem  that  complement  the 
traditional umbrella energy and carbon tax.  

instruments 

Nearly  half  of 
the  financial  schemes 
dedicated  to  energy  efficiency  are  grant-
based,  but  some  other  programmes  are 
based  on  tax  reliefs.  Despite  the  existence  of 
financial 
for  energy  efficiency 
financing  (e.g.  the  Gröna  obligationer  (70), 
its 
increased  use  should  diversify  away  from  a 
primarily grant-based environment. In addition, the 
energy efficiency angle in industry and businesses 
has scope to be improved, as currently residential 
buildings receive most support. 

Sweden  carries  out  a  low  number  of  market 
surveillance  activities  on  products  covered 
by eco-design and energy labelling. This raises 
concerns with respect to the level playing field for 
economic operators; and uncertainty regarding the 
compliance  levels  of  the  concerned  products  (and 
therefore  possible  missed  energy  and  CO2 
savings). 

(the 

Nordic-Baltic 

Sweden has two projects of common interest 
for  hydrogen  interconnectors:  the  first  with 
Finland 
Hydrogen 
Corridor);  and  the  second  with  Finland  and 
Germany (the Baltic Sea Hydrogen Collector). 
No  official  statistics  are  available  as  yet  for 
hydrogen  production  or  electrolyser  capacity  in 
Sweden. 

Sweden remains highly dependent on non-EU 
countries  for  clean  energy  technologies 
(particularly 
solar  PV  and  wind 
components).  Sweden  has  a  strong  position  in 
battery  manufacturing  with  the  first  circular 

for 

(69)  Final energy consumption in households from Eurostat (data 
tables of December 2023) and climate-corrected by the 
Joint Research Centre with 2005-2022 as the reference 
period (FEC climate-corrected = FEC/(HDD/HDD reference 
period). 

(70)  Swedens-sovereign-green-bond-framework.pdf 

(riksgalden.se) 

 
 
 
battery production gigafactory in Skellefteå. Other 
manufacturing  plants  for  battery  and  battery 
components  are  in  the  pipeline,  including  on 
anodes, cathodes and separators. An expansion of 
the  factory  in  northern  Sweden  is  expected  to 
increase  battery  production  capacity  to  up  to  60 
Gwh per year. This expansion has received support 
InvestEU  programme.  Solar  PV 
through 
the 
projects  have  also 
received  EU  funds  and 
Sweden’s manufacturing capacity of modules and 
cells  is  expected  to  increase  in  the  coming  years. 
Sweden is already a leader in the EU in mining and 
will  play  an  important  role  in  supporting  the  EU’s 
supply  of 
the 
manufacturing  of  clean  technologies  such  as 
batteries (see Annex 12).  

raw  materials 

critical 

for 

reserves  and 

Sweden  is  prominent  in  many  low-carbon 
technologies  (e.g. efficient  biofuels  for  low-
carbon  energy 
transition;  forestry  and 
bioenergy;  research  and  demonstration  in 
transport;  electrification;  batteries  and 
smart  grids).  Sweden  has  rare  earth  elements 
(REE) 
is  developing  mining 
investment  proposals  (Annex  12).  Domestic  REE 
mining, 
permanent  magnet 
manufacturing  are  important  assets  in  the  wind 
industry  value  chain.  New  graphite  processing 
plants  are  also  under  development.  Sweden  is 
piloting fossil-free steel production and is planning 
to build a hydrogen green steel plant. Sweden is at 
the forefront on technology and research to make 
energy-intensive 
industry  more  energy-  and 
resource-efficient  and  ultimately  free  from  CO2 
emissions. 

refining 

and 

40 

 
Table A7.1:  Key Energy Indicators 

(1) The ranking of the main suppliers is based on the latest available figures (for 2022) 
(2) Venture Capital investment includes Venture Capital deals (all stages), Small M&A deals and Private Equity (PE) growth deals 
(for companies that have previously been part of the portfolio of a VC investment firm or have received Angel or Seed funding). 
Source: Eurostat, Gas Infrastructure Europe, JRC elaboration based on PitchBook data (03/2024), JRC SETIS (2024) 

41 

20192020202120222019202020212022Import Dependency [%] 30.0%32.0%21.2%26.8%60.5%57.5%55.5%62.5%of Solid fossil fuels 103.2%98.8%94.2%104.7%43.3%35.8%37.3%45.8%of Oil and petroleum products 106.8%118.1%72.4%104.4%96.7%96.8%91.7%97.7%of Natural Gas 100.0%100.0%100.0%100.0%89.7%83.6%83.6%97.6%Dependency from Russian Fossil Fuels [%]of Natural Gas 0.0%12.7%9.8%7.6%39.7%41.3%41.1%21.0%of Crude Oil29.9%10.8%12.1%4.1%28.8%26.7%26.4%19.5%of Hard Coal17.7%23.8%30.8%4.8%43.5%49.1%47.4%21.5%2016201720182019202020212022Gas Consumption (in bcm)0.9                   1.1                   1.2                   1.1                 1.1                 1.2                 0.9                 Gas Consumption year-on-year change [%]-4.5%23.9%7.2%-6.6%-2.8%5.6%-26.5%Gas Imports - by type (in bcm)0.9                   1.1                   1.1                   1.1                 1.4                 1.2                 0.8                 Gas imports - pipeline0.9                   0.8                   0.8                   0.8                 0.8                 0.8                 0.6                 Gas imports - LNG0.00.30.30.30.70.40.2                 Gas Imports - by main source supplier (in bcm) (1)Norway-                   0.2                   0.1                   0.1                 0.1                 0.0                 0.1                 Denmark0.9                   0.8                   0.8                   0.8                 0.8                 0.8                 0.6                 Russia-                   -                   -                   -                 0.2                 0.1                 0.1                 20192020202120222023LNG Terminals - storage capacity m3 LNGNumber of LNG Terminals00000LNG Storage capacity (m3 LNG)00000Underground StorageNumber of storage facilities1                      1                      1                      1                    1                 Technical Capacity (bcm)0.01                 0.01                 0.01                 0.01               0.01               20162017201820192020202120222023Gross Electricity Production (GWh) (2)156 010          164 250          163 400          168 439        163 833        171 798        173 159        -              Combustible Fuels15 150         15 547         15 571         16 390       13 618       16 137       16 015       -              Nuclear63 101         65 696         68 549         66 130       49 198       52 965       51 944       -              Hydro62 137         65 168         62 250         65 393       72 440       73 926       69 967       -              Wind15 479         17 609         16 623         19 847       27 526       27 244       33 253       -              Solar143              230              407              679             1 051         1 526         1 980         Geothermal0000000-              Other Sources0000000-              Gross Electricity Production [%]Combustible Fuels9.7%9.5%9.5%9.7%8.3%9.4%9.2%-              Nuclear40.4%40.0%42.0%39.3%30.0%30.8%30.0%-              Hydro39.8%39.7%38.1%38.8%44.2%43.0%40.4%-              Wind9.9%10.7%10.2%11.8%16.8%15.9%19.2%-              Solar0.1%0.1%0.2%0.4%0.6%0.9%1.1%-              Geothermal0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Other Sources0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Net Imports of Electricity (GWh)11 735-            18 992-            17 223-            26 161-           24 997-           25 568-           33 219-           -              As a % of electricity available for final consumption -9.0%-14.6%-13.2%-20.5%-19.8%-19.5%-26.4%-              Electricity Interconnection [%]25.6%26.0%25.2%24.2%16.3%14.4%12.8%Share of renewable energy consumption - by sector [%]-              Electricity64.9%65.9%66.2%71.2%74.5%75.8%83.3%-              Heating/cooling63.4%63.6%63.3%64.4%66.4%68.8%69.4%-              Transport26.6%26.8%29.7%30.3%31.9%28.6%29.2%-              Overall52.6%53.4%53.9%55.8%60.1%62.7%66.0%-                 20192020202120222023VC investments in climate tech start-ups and scale-ups (EUR Mln)977.32         543.99         3 417.12      1 991.05       3 034.80       as a % of total VC investment (3) in Sweden start-ups and scale-ups28.0%15.7%39.4%29.9%71.8%Research & Innovation spending in Energy Union R&i prioritesPublic R&I (EUR mln)154.6           206.6           245.7           -              -              Public R&I (% GDP)0.032%0.043%0.046%-              -              Private R&I (EUR mln)774.3           792.5           -               -              -              Private R&I (% GDP)0.162%0.165%-                   -                 -                 ELECTRICITY/ENERGYCLEAN ENERGYSwedenEUENERGY DEPENDNCEDIVERSIFICATION OF GAS SUPPLIES 
 
 
 
   
 
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY 

This  Annex  monitors  Sweden’s  progress  in 
ensuring  a  fair  transition  towards  climate 
neutrality  and  environmental  sustainability, 
particularly  for  workers  and  households  in 
vulnerable situations. Sweden’s green economy 
is  expanding.  Between  2015  and  2021, 
employment  in  the  environmental  goods  and 
services  sector  grew  by  30.5%    (EU:  18.2%), 
reaching,  at  160 900  workers,  3.1%  of  total 
employment  (EU:  2.7%).  Also,  between  2015  and 
2022,  the  greenhouse  gas  emission  intensity  of 
Sweden’s  workforce  (see  Graph  A8.1  and  Table 
A8.1)  declined  from  9.8 to  8.0 tonnes  per  worker, 
below  the  EU  average  (14.3  tonnes  per  worker  in 
2022) (71),  indicating  a  positive trend  in the  green 
transition.  Sweden  has  the  highest  upskilling  rate 
for the green transition in the  EU, in line with the 
Council  Recommendation  of  2022 (72),  which 
supports 
the 
implementation  of  the  REPowerEU  plan.  Sweden’s 
recovery  and  resilience  plan  (RRP)  promotes  a 
sustainable  and  inclusive  recovery,  for  instance 
the  Climate  Leap 
through 
in 
programme, 
the  measures 
supported  by  the  Just  Transition  Fund  (JTF)  and 
action supported by the European Social Fund Plus 
(ESF+). The RRP focuses on increasing the number 
of places in higher education and upper secondary 
vocational training. 

complementing 

investment 

transition 

and 

fair 

the 

Graph A8.1: Fair transition challenges in Sweden 

Source:  Eurostat,  EU  Labour  Force  Survey,  EMPL-JRC  GD-
AMEDI/AMEDI+ and DISCO(H) projects (see Table A8.1). 

(SMEs) 

enterprises 

energy-intensive 

Employment  in  Sweden’s  sectors  that  are 
most  affected  by  the  green  transition 
slightly  decreased.  In  2023,  employment  in 
industries (73) 
Sweden’s 
comprised 2.6% of total employment (3.5% in the 
EU). Employment in mining and quarrying has risen 
by  24.7%  since  2015  (to around  11  600  workers 
in 2023). The job vacancy rate in construction (see 
Graph A8.2), a key sector for the green transition, 
is lower than the EU average (1.7% vs 3.6% in the 
EU  in  2023).  Nevertheless,  54%  of  small  and 
the 
medium-sized 
construction  sector  reported  that  skills  shortages 
are  holding  them  back 
in  general  business 
activities (74).  According  to  the  European  Labour 
shortages  were 
Authority 
reported in 2023 for a number of occupations that 
required specific skills or knowledge for the green 
transition (76),  including  mechanical  engineering 
technicians, power production plant operators and 
plumbers and pipe fitters. The job vacancy rate for 
transportation is lower than the EU average (2.2% 
vs EU: 2.7% in 2022), while the job vacancy rate in 
the  electricity  and  gas  supply  sector  keeps  being 
considerably  above  the  EU  average.  In  2022,  it 
was  4.6  percentage  points  higher  than  the  EU 
average (6.3% vs EU: 1.7% in 2022). 

(ELA) (75), 

labour 

in 

(71)  Workforce-related calculations are based on the EU Labour 
Force Survey. Note, in the 2023 country report for Sweden, 
such indicators were calculated based on employment 
statistics in the national accounts. This may result in limited 
comparability across the two reports. 

(72)  54) The 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 

(73)  Mining and quarrying (NACE B), chemicals (C20), minerals 

(C23), metals (C24) and automotive (C29) 

(74)  Eurobarometer on skills shortages, recruitment, and retention 

strategies in small and medium-sized enterprises. 

(75)  Based on the European Labour Authority 2024 EURES Report 
on labour shortages and surpluses 2023, i.e., data submitted 
by the EURES National Coordination Offices. 

(76)  Skills and knowledge requirements are based on the 

European Skills Competences and Occupations (ESCO) 
taxonomy on skills for the green transition. 

42 

0.00.51.01.52.02.53.0Greenhouse gasemissions per workerEmployment inEnergy-IntensiveIndustriesEducation & trainingin Energy-IntensiveIndsutriesEnergy povertyTransport poverty(proxy)Carbon inequalitySE Latest vs EU LatestEU LatestSE 2015 vs EU Latest 
 
 
     
 
 
Table A8.1:  Key indicators for a fair transition in Sweden 

Source: Eurostat (env_ac_ainah_r2, lfsa_egan2d, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-JRC 
GD-AMEDI/AMEDI+ and DISCO(H) projects. 

Upskilling  and  reskilling  in  energy-intensive 
industries 
is  well  on  track,  thanks  to 
increased participation in  learning  activities. 
Skills  are  of  core  importance  for  both  preserving 
jobs  in  transforming  sectors  and  for  smooth 
labour  market  transitions. 
In  energy-intensive 
industries,  workers’  participation  in  education  and 
training  increased  from  23.0%  in  2015  to  29.9% 
in  2023,  well  above  the  EU  average  (10.9%).  In 
Sweden,  38%  of  SMEs  indicate  that  the  skills 
required  for  greening  business  activities  are 
becoming  more 
If 
important 
Sweden  matches  its  projected  contribution  to  the 
EU’s  renewable  energy  target,  between  800  and  
2 400 additional skilled workers will be needed for 
the deployment of wind and solar energy by 2030, 
which  may  require  an  investment  in  skills  of  EUR 
8.8-11.0 million (77). To address this challenge, the 
JTF supports upskilling and reskilling measures for 
the steel industry in Norrbotten County and for the 
metal industry in Västerbotten County. Meanwhile, 
reskilling 
the  ESF+  provides  upskilling  and 
opportunities for the whole country.  

(EU:  42%) (74). 

(77)  EMPL-JRC AMEDI+ project. 

43 

Graph A8.2: Job vacancy rate in transforming 
sectors and mining and quarrying 

B - Mining and quarrying 
C - Manufacturing 
D - Electricity, gas, steam and air conditioning supply 
E - Water supply; sewerage, waste management and 
remediation activities 
F - Construction 
H - Transportation and storage 
Source: Eurostat jvs_a_rate_r2. 

Energy  poverty  and,  in  particular,  transport 
poverty  indicators  have  worsened  since  the 
spike  in  energy  prices,  with  the  poorest 
households  being  the  most  affected.  The 
share  of  the  population  unable  to  keep  their 
homes  adequately  warm  increased  from  1.2%  in 
2015  to  3.3%  in  2022,  still  well  below  the  EU 
average (9.3%) (78). The indicator increased by 1.6 
percentage points between 2021 and 2022 on the 
back  of  energy  price  increases  due  to  supply 
constraints caused by the COVID-19 pandemic and 
Russia’s  war  of  aggression  against  Ukraine, 
despite  the  emergency  measures  implemented  in 
Sweden. 5.5% of the population at risk of poverty 
(AROP)  (EU:  20.1%)  and  3.9%  of  lower  middle-
income  households  (in  deciles  4-5)  (EU:  11.6%) 
were unable to keep their homes adequately warm 
in  2022.  The  RRP  includes  financial  incentives 
aiming  to  increase  energy  efficiency  of  multi-
dwelling buildings through renovations. In January 

(78)  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. 

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%BCDEFHEU 2023SE 2023SE 2015IndicatorDescriptionSE 2015SEEUGHG per workerGreenhouse gas emissions per worker – CO2 equivalent tonnes9.88.0 (2022)14.3 (2022)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24) and automotive (C29)2.6%2.6% (2023)3.5% (2023)Education & training EIIAdult participation in education and training (last 4 weeks) in energy-intensive industries22.8%29.9% (2023)10.9% (2023)Energy povertyShare of the total population living in a household unable to keep its home adequately warm1.2%3.3% (2022)9.3% (2022)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport39.6%43.0% (2023)37.1% (2023)Carbon inequalityRatio between the consumption footprint of the top 20% vs bottom 20% of the income distribution1.51.5 (2021)2.7 (2021) 
 
        
 
 
 
     
 
implications  of  the  green  transition  for  the 
Swedish labour market (83). 

2023,  43.0%  of  the  population  at  risk  of  poverty 
spent  more  than  6%  of  their  budget  on  private 
transport fuels (EU: 37.1%) (79). Sweden addresses 
energy  poverty  issues  through  its  general  social 
policy  and  welfare  measures  thus  it  does  not 
establish  an  ad  hoc  national  objective  or  plan  to 
reduce  energy  poverty  in  line  with  indicators 
identified 
the 
Commission on energy poverty. 

the  Recommendation  of 

in 

Despite  being  below 
the  EU  average, 
environmental inequalities remain an issue in 
Sweden.  In  2021,  the  consumption  footprint   for 
20%  of  the  population  with  the  highest  income 
was  1.5  times  higher  than  the  footprint  of  the 
poorest  20% (80)  (EU:  1.8).  For  both  groups,  the 
consumption  footprint  is  highest  for  food  and 
mobility.  The  average  levels  of  air  pollution  in 
2021  stood  below  the  EU  average  (5.6  vs  11.4 
µg/m3  PM2.5),  and  all  regions  were  below  critical 
levels  of  air  pollution (81).  However,  an  estimated 
650  premature  deaths  occur  annually  due  to 
exposure to air pollution (82). 

In 

the 

line  with 

The overall implementation of fair transition 
measures  is  progressing  well  but  there  is 
still  scope  for  further  targeted  green 
Council 
measures. 
Recommendation  of  2022,  several  general  labour 
market programmes, skills development measures 
and  lifelong  learning  opportunities  are  in  place, 
including  the  newly  introduced  student  finance 
scheme for transition and retraining. The Swedish 
labour  relations  with  their  long-term  tradition  of 
collective bargaining provide a suitable framework 
for  managing  digital  and  green  transitions  and 
their  impact  on  employment  and  jobs.  However, 
there  continue  to  be  knowledge  gaps  as  regards 
the  potential  social  and  distributional  impacts  of 
the 
the  overall  climate  policy,  as  well  as 

(79)  Affordability of private transport fuels is key dimension of 

transport poverty. The indicators has been developed in the 
context of the EMPL-JRC GD-AMEDI/AMEDI+ projects. 
Methodology explained in Economic and distributional effects 
of higher energy prices on households in the EU. 

(80)  Developed in the context of the EMPL-JRC DISCO(H) project. 
Methodology explained in Joint Research Centre, 2024. 
Carbon and environmental footprint inequality of household 
consumption in the EU. JRC137520. The EU average refers to 
EU27 without Italy (household income data not available for 
IT in the HBS) 

(81)  Two times higher than the recommendations in the WHO Air 

Quality Guidelines (annual exposure of 5µg/m3).  

(82)  EEA - Air Quality Health Risk Assessment 

(83)  Based on the monitoring review of the Council 

Recommendation on ensuring a fair transition towards 
climate neutrality, which took place in October 2023. 

44 

 
 
 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

circularity, 

The green transition of industry and the built 
environment,  in  particular  decarbonisation, 
resource  efficiency  and 
is 
Sweden’s 
essential 
competitiveness (84). In this regard, priorities for 
Sweden  are  reducing  its  reliance  on  incineration 
and  increasing  its  use  of  circular  materials  and 
circular  business  models 
industry  and 
construction. 

boost 

to 

in 

is 

The  pace  of  Sweden’s  circular  economy 
transition 
insufficient  to  achieve  the 
Circular  Economy  Action  Plan  goals.  The 
material  footprint remained among the highest in 
the EU and increased to 26.9 tonnes per capita in 
2022, after a drop in 2020. Moreover, the amount 
of  total  waste  produced  increased  from  12.4  to 
14.7  tonnes  per  capita  between  2010  and  2020, 
roughly three times the EU average of 4.8 tonnes 
per  capita  and  the  third-highest  value  among  all 
Member States. There is still room to make better 
use  of  the  potential  of  the  circular  economy 
transition to drive the decarbonisation of Sweden’s 
industry. The Swedish national energy and climate 
plan  does  not  mention  the  circular  economy  in 
relation to  greenhouse  gas  reductions  and  energy 
efficiency.  Furthermore,  its  section  on  research, 
development and innovation contains few details. 

Graph A9.1: ETS emissions by sector since 2013 

Source: European Commission 

Between  2019  and  2023,  greenhouse  gas 
emissions  from  the  sectors  covered  by  the 
EU  emissions  trading  system 
in 
Sweden (85)  declined  by  10%.  In  2023,  only 

(ETS) 

(84)  See also Annexes 6, 7 and 12. 

(85)  This analysis excludes air travel. For more details and the 
data sources, see Weitzel, M; van der Vorst, C. (2024), 
Uneven progress in reducing emissions in the EU ETS, JRC 
Science for policy brief, JRC138215, Joint Research Centre.  

18%  of  greenhouse  gases  emitted  by  Sweden’s 
ETS installations came from power generation. Of 
the  total  emissions  from  all  industry  sectors, 
cement  and  lime  production  emitted  16%,  the 
metals industry emitted 43%, refineries accounted 
for  19%,  and  21%  came  from  other  industries. 
With 1%, the share of the chemicals industry was 
negligible.  Between  2019  and  2023,  emissions 
from  the  power  sector  decreased  by  40%,  while 
the  industry  sectors  slightly  increased  emissions, 
by  1%  (EU  averages:  26%  and  14%,  resulting  in 
an  overall  decrease  of  14%).  Between  2013  and 
2023, greenhouse gas emissions declined by 56% 
in  power  generation  but  increased  by  5%  in 
industrial  manufacturing, driven mainly  by metals 
but also by refineries.   

of  11.5%).  Resource 

There  is  still  room  for  improving  Sweden’s 
secondary 
industrial  efficiency.  Sweden’s 
material use stood at 6.1% in 2022 (versus an EU 
average 
productivity 
stagnated  between  2017  and  2022  and  the 
distance to the EU average is still significant: 1.56 
versus 2.45 purchasing power standards per kg in 
2022.  Water  abstraction 
for  manufacturing 
purposes  accounted  for  57.7%  of  total  water 
abstracted  in  2018,  making  manufacturing  the 
economic activity with the largest impact on water. 

Strong  eco-innovation  performance  has 
helped  to  develop  a  highly  competitive 
environmental  goods 
industry.  The  2022 
Eco-Innovation  Scoreboard  placed  the  country 
among the eco-innovation leaders, with a score of 
160.95  points.  As  of  September  2023,  Sweden 
totalled  52  awarded  EU  Ecolabel  licences  and 
6 123  products  with  the  EU  Ecolabel,  showing  a 
steady increase in both products and licences.  

in 

Progress  has  been  achieved 
limiting 
industry’s  pollution.  The  impact  of  particulate 
matter emissions from the Swedish industry on air 
the  EU  average.  PM2.5 
quality  was  below 
(EUR’10) (86) 
emissions  per  economic  output 
decreased  to  0.05 g  in  2021,  versus  an  EU 
average of 0.07 g/EUR’10 in 2020. A similar trend 
for  PM10  emissions,  which 
was 
decreased 
to 
0.07 g/EUR’10  in  2021,  versus  an  EU  average  of 
0.10 g/EUR’10  in  2020.  Moreover,  between  2010 

from  0.09 g/EUR’10 

in  2017 

reported 

(86)  In 2010 prices. 

45 

00.20.40.60.810510152020132014201520162017201820192020202120222023Emissions relative to 2013Mt CO2eCement & LimeChemicalsMetalsRefineriesPower generationOtherSweden (both axes) 
 
 
  
 
 
 
and 2021, the Swedish industrial sector decreased 
its emissions of all main pollutants into the air. 

packaging waste, which is expected to help reduce 
incineration. 

Graph A9.2: Treatment of municipal waste 

There is scope to use existing buildings more 
efficiently.  In  2023,  Sweden’s  building  permits 
index, based on useful floor area, stood at 86.7 on 
average (87). In 2020, the residential floor area per 
capita  was  55.43 m2,  versus  an  EU  average  of 
54.42 m2.  Also,  the  non-residential  floor  area  per 
capita  of  20.92 m2  was  higher  than  the  EU 
average  (18 m2  in  2020)  and  it  has  remained 
relatively  stable  over  time.  In  2020,  Sweden 
submitted  a  long-term  renovation  strategy  that 
aims to decarbonise the building stock. 

To  meet  the  EU  targets,  Sweden  would  need 
to  minimise  the  pressure  from  human 
activities. Construction and demolition waste per 
capita  tripled  between  2010  and  2020,  while 
remaining below the EU average. The proportion of 
backfilling has increased since 2014 and stood at 
20.4%  in  2020,  above  the  EU  average  of  9.9%. 
However,  Sweden’s  recovery  rate  decreased  from 
90%  in  2018  to  52%  in  2021.  The  country 
achieved  the  Waste  Framework  Directive’s  target 
of  recovering  70%  by  2020  (the  value  reached 
74%  in  2020),  but  more  action  is  needed  to 
the 
improve  circularity.  Large  businesses 
Swedish  construction  sector  are  advanced 
in 
reporting  circular  business  models  covering  waste 
materials,  energy,  and  water.  Sweden  has  also 
cycle  assessment 
developed  simplified 
methodologies  and  whole-life  carbon  databases, 

life 

in 

Source: Eurostat 

and 

away 

shifting 

Sweden  would  benefit  from  reducing  waste 
generation 
from 
incineration.  The  municipal  waste  recycling  rate 
stood  at  39.7%  in  2022,  and  Sweden  is  not  on 
track to meet the municipal waste recycling target 
by  2025.  The  plastic  packaging  recycling  rate 
dropped  to  23.8%  in  2021  and  e-waste  recycling 
rate  decreased  to  76.3%  in  2021.  Sweden  relies 
more  on  waste  incineration  with  energy  recovery 

Table A9.1:  Circularity indicators 

Source: Eurostat, European Environment Agency 

incineration 
than  any  other  EU  country.  The 
is  higher  than  the  domestic  waste 
capacity 
for 
generation,  so  Sweden 
incineration. 
treatment 
technologies  is  slowing  down,  with  only  5  new 
patents  registered  in  2021.  However,  Sweden  is 
currently  expanding  curb  side  collection  of 

imports  waste 

in  waste 

Innovation 

to  facilitate  whole-life  carbon  accounting  and 
regulation. In 2027, Sweden plans to introduce CO2 
limits for new buildings. 

(87)  2015=100. 

46 

434449431418395010020030040050020182019202020212022Kg per capita Waste treatment to be determinedLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-27201820192020202120222023EU-27Latest yearIndustryResource productivity (purchasing power standard (PPS) per kilogram)1.51.51.51.51.6-2.52022Circular material use rate (%)6.66.46.96.26.1-11.52022Eco-innovation index (2013=100)164.0168.2163.9157.6161.0-121.52022Recycling of plastic packaging (%)50.053.233.523.8--40.72021Cost of air emissions from industry (EUR bn)6.76.56.06.3--352.72021Built environmentRecovery rate from construction and demolition waste (%)90.0-74.052.1--89.02020Soil sealing index (base year = 2006)102.5-----103.42018Non-residential floor area (m2 per capita)20.820.920.9---18.02020Waste backfilled (%)19.1-20.4-21.4-9.92020 
           
 
 
           
 
ANNEX 10: DIGITAL TRANSFORMATION 

infrastructure/connectivity 

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  21.2%  of  its  total  RRP 
budget  to  digital  (EUR  0.7  billion) (88).  Under 
Cohesion Policy, an additional EUR 0.2 billion (13% 
of  the  country’s  total  Cohesion  Policy  funding)  is 
allocated 
digital 
transformation (89). 

country’s 

and 

the 

to 

The  Digital  Decade  Policy  Programme  sets 
out  a  pathway  for  EU’s  successful  digital 
transformation  by  2030.  Sweden’s  national 
roadmap outlines the actions it intends to take to 
reach the objectives and targets at national  level. 
The first Report on the State of the Digital Decade 
highlighted the need to accelerate and deepen the 
collective efforts to reach the EU-wide targets and 
objectives (90).  Among  others,  a  digitally  skilled 
population 
the  development  and 
adoption  of  digital  technologies  and  leads  to 
productivity  gains  and  new  business  models.  It 
also  leads  to  higher  inclusion  and  participation  in 
an environment increasingly shaped by the digital 
transformation (91). 
technologies, 
infrastructure  and  tools  all  play  a  role 
in 
addressing 
the  current  structural  challenges, 
including  strategic  dependencies,  cybersecurity 
and climate change. 

increases 

Digital 

(88)  The share of financial allocations that contribute to digital 
objectives has been calculated using Annex VII to the 
Recovery and Resilience Facility Regulation. 

(89)  This amount includes all investment specifically aimed at or 
substantially contributing to digital transformation in the 
2021-2027 Cohesion Policy programming period. The source 
funds are the European Regional Development Fund, the 
Cohesion Fund, the European Social Fund Plus, and the Just 
Transition Fund. 

(90)  European Commission (2023): Report on the State of the 

Digital Decade 2023, 2023 Report on the state of the Digital 
Decade | Shaping Europe’s digital future (europa.eu). 

(91)  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) and OECD (2019): Going Digital: 
Shaping Policies, Improving Lives – 
Summary, https://www.oecd.org/digital/going-digital-
synthesis-summary.pdf. 

Sweden remains one of the top performers in 
digital  skills.  The  country  performs  well  above 
the  EU  average  for  basic  and  advanced  digital 
skills.  Sweden  considers  digital  skills  as  a  central 
component of all relevant strategies and measures 
and 
higher-level 
(including 
vocational  training).  Furthermore,  Sweden’s  RRP 
contains  investment  measures  to  increase  the 
number  of  study  places  at  universities  and  other 
higher-education  institutions,  including  in  higher 
vocational education in relevant fields. 

education 

for 

on 

high 

scores 

digital 
Sweden 
infrastructure/connectivity. Sweden’s very high 
capacity network (VHCN) coverage is above the EU 
average.  Sweden’s  2016  broadband  plan (92) 
announced  that  the  entire  country  should  have 
access  to  high-speed  connectivity,  mainly  using 
fibre.  In  areas  where  the  costs  of  deploying  fibre 
are prohibitive (expected to affect less than 2% of 
the  population),  mobile  technologies  are  being 
assessed.  Moreover,  as  part  of  its  RRP,  Sweden 
aims  to  promote  fixed  high-speed  broadband 
networks  in  areas  where  access  would  not  be 
provided  on  a  commercial  basis  alone.  Regarding 
5G coverage, Sweden spectacularly caught up with 
the  EU  average  by  improving  from  20%  to  90% 
coverage between 2022 and 2023. This is mainly 
due  to  Sweden  successfully  completing  several 
spectrum auctions in 2023. 

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 companies’ use of 
advanced technologies like 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.  In  2022,  3.8%  of  enterprises  in  Sweden 
reported  ICT  service  outage  due  to  cyberattacks 
ransomware  attacks,  denial  of  service 
(e.g. 
attacks).  Over  the  same  year,  37%  of  enterprises 
developed  or  reviewed  their  ICT  security  policy 
within the previous 12 months. 

Sweden  performs  well  on  the  digitalisation 
of public services. The country scores above the 
EU average in digital public services for people and  

(92) https://pts.se/globalassets/sverige-helt-uppkopplat-2025-

slutlig.pdf  

47 

 
 
 
 
 
Table A10.1:Key Digital Decade targets monitored by the Digital Economy and Society Index 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 evolution will also be monitored separately and taken 
into consideration when interpreting VHCN coverage data in the Digital Decade. 
(3) At least 75% of EU 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 

businesses, but interoperability and data exchange 
between  different  authorities  could  be  improved. 
The  Agency  for  Digital  Government  (Digg)  acts  as 
a  central  hub  in  this  area.  The  government 
requested  a  new  study  to  propose  a  national  law 
to  improve  interoperability  within  the  Swedish 
public  sector.  The  results  of  the  study  were 

in  December  2023 (93).  The  study 
presented 
proposed  gathering  all  interoperability  aspects 
relevant  for  public  services  in  a  single  piece  of 
legislation.  Furthermore,  it  also  suggested  that 
Digg should prescribe standards and specifications 
to  ensure  interoperability  in  the  whole  public 

(93)https://www.regeringen.se/contentassets/6866c386b0ec492c

8171c92c9c8922cf/en-reform-for-datadelning-sou-
202396.pdf  

48 

EUDigital Decade target by 2030 2022202320242024(EU)Digital skillsAt least basic digital skills67%67%66%56%80%% individuals20212021202320232030ICT specialists (1)8.0%8.6%8.7%4.8%20 million% individuals in employment aged 15-7420212022202320232030Digital infrastructure/connectivityFixed very high capacity network (VHCN) coverage83%82%88%79%100%% households20212022202320232030Fibre to the premises (FTTP) coverage (2)82%82%84%64%-% households2021202220232023Overall 5G coverage18%20%90%89%100%% populated areas20212022202320232030Digitalisation of businessesSMEs with at least a basic level of digital intensity86%NA80%58%90%% SMEs2021202320232030Data analyticsNANA35%33%-% enterprises20232023Cloud69%69%66%39%-% enterprises2021202120232023Artificial intelligence10%10%10%8%-% enterprises2021202120232023AI or cloud or data analytics (3)NANA73%55%75%% enterprises202320232030Digitalisation of public servicesDigital public services for citizens85889379100Score (0 to 100)20212022202320232030Digital public services for businesses88889685100Score (0 to 100)20212022202320232030Access to e-health recordsNA707879100Score (0 to 100)2022202320232030Sweden 
 
 
     
 
 
 
 
 
 
and 

across 

sector. With the aim of standardising solutions for 
public 
businesses 
citizens 
administration, Sweden’s RRP includes investments 
to develop new digital services and to upgrade and 
modernise  existing  ones.  Sweden  has  notified 
three  electronic  identification  (e-ID)  means  under 
the eIDAS Regulation: BankID, Freja eID, and EFOS. 
These  e-ID  schemes  offer  the  possibility  of 
interacting  with  public  organisations  via  a  smart 
device. In December 2022, the government asked 
for  a  study  on  how  to  issue  a  secure  and  trusted 
eID.  The  study’s  findings  were  presented 
in 
October 2023 (94). 

(94)https://www.regeringen.se/contentassets/a5930bae77714ecc
9e9a7b51e9f240ae/en-saker-och-tillganglig-statlig-e-
legitimation-sou-202361.pdf  

49 

 
 
 
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  transition  and  ensuring  long-
term competitiveness. 

Sweden  is  an  ‘innovation  leader’  with  a 
performance  substantially  higher  than  the 
European  average.  According  to  the  2023 
edition of the European Innovation Scoreboard (95), 
the  country’s  overall  performance  is  134.5%  of 
the EU average. It has increased by 10 percentage 
points  since  2016,  at  a  higher  rate  than  the  EU’s 
(8.5%),  which  means  Sweden’s  performance  lead 
over the EU average has been widening (see Annex 
12). 

Sweden has the second highest R&D intensity 
in  the  EU  (3.4%  of  GDP  in  2022) (96)  and  it  is 
among  the  top  performers  in  terms  of  business 
investment  in  R&D  (2.51%  of  GDP  in  2022)  and 
public  R&D  investment  (0.89%  of  GDP  in  2022). 
However,  compared  to  2020,  there  is  a  slight 
decrease in all three indicators. 

Graph A11.1: R&D intensity (gross domestic 
expenditure on R&D as % of GDP) 2010-2022 

Source: Eurostat 

The  Swedish  recovery  and  resilience  plan 
(RRP)  features  a  EUR 286  million  research 
and  innovation  investment  to  support  the 
green  transition (97).  This  accounts  for  around 

(95)  2023 European Innovation Scoreboard (EIS), country profile: 
Sweden https://ec.europa.eu/assets/rtd/eis/2023/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). 

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

(97)  Further information: https://www.oecd-
ilibrary.org/docserver/45d3a149-

50 

investment 

to  help  decarbonise 
in  particular  projects 

8.3% of the EU’s contribution to the RRP (modified 
in  2023).  A  particular  focus  is  on  support  for 
the 
climate 
industrial  sector, 
that 
develop,  demonstrate  and 
implement  new 
technology  with  zero, low or  negative  greenhouse 
gas  emissions  in  industries  with  high  process 
emissions.  This  investment  is  complemented by  a 
rich  set  of  other  policy  initiatives  directed  at 
instance  the  recently 
societal  challenges,  for 
launched Impact Innovation Initiative. 

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 (98). 

attractive 

research 

systems 

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 (99).  The  number  of  new  doctoral 
graduates  has  fallen  sharply  since  2016 (100).  The 
number of new graduates in science & engineering 
per  thousand  population  aged  25-34  has  also 
decreased  over  the  last  10  years,  although  a 

en.pdf?expires=1702286900&id=id&accname=oid031827&
checksum=97D42A2035DC16C5241D11E37FA85C21. 

(98)  Such as measured by citation impact, see Swedish Research 
Barometer 2023, https://www.vr.se/analys/rapporter/vara-
rapporter/2023-11-30-forskningsbarometern-2023.html  
and https://ec.europa.eu/research-and-
innovation/en/statistics/performance-indicators/european-
innovation-scoreboard/eis#. 

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

(100) 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  

1.522.533.5201020152016201720182019202020212022as % of GDPEUSE 
 
     
 
 
 
 
Table A11.1:Key innovation indicators 

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

related 

issue  might  be 

slightly  positive  trend  has  been  noticed  since 
2019 (101).  This 
to 
deteriorating  basic  skills  as  shown 
in  PISA 
(Programme for International Student Assessment) 
2022,  where 
share  of  pupils  who 
underperform  has  increased  by  8.4  pps  in  maths, 
by  4.7  pps  in  science  and  by  5.9  pps  in  reading 
since 2018. 

the 

(101) Source: Eurostat. 

51 

R&D intensity (GERD as % of GDP)3.173.223.493.43.42.24Public expenditure on R&D as % of GDP0.990.970.960.930.890.73Business enterprise expenditure on R&D (BERD) as % of GDP2.182.242.532.472.511.48Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 12.81311.9::9.6Patent Cooperation Treaty (PCT) patent applications per billion GDP (in PPS)9.59.38.6::3.4Public-private scientific co-publications as % of total publications111111.612:7.6Public expenditure on R&D financed by business enterprise (national) as % of GDP:0.039:0.029:0.054New graduates in science & engineering per thousand pop. aged 25-3414.313.912.913.7:16.9Total public sector support for BERD as % of GDP:::0.14:0.204R&D tax incentives: foregone revenues as % of GDP00.019:0.038:0.104Share of environment-related patents in total patent applications filed under PCT (%)13.712.811.2: :14.7Venture capital (market statistics) as % of GDP0.0870.0530.0720.1290.1610.085Employment share of high growth enterprises measured in employment (%):14.8319.18::12.51EU 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 2022Sweden2010201520202021 
 
 
 
 
 
 
 
 
 
     
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

robust  educational 

Sweden  has  a  highly  competitive  economy, 
levels, 
founded  on 
political stability, and substantial investment 
in  R&D.  However,  according  to  the  IMD  World 
Competitiveness  Ranking (102),  Sweden  dropped 
four  places  to  8th  in  2023.  Despite  this  setback, 
Sweden  remains  strong  in  key  areas  such  as 
infrastructure  (4th)  and  business  efficiency  (6th). 
Significant  declines  have  nonetheless  been 
observed  in  economic  performance  (from  21st  to 
28th),  government  efficiency  (from  5th  to  14th) 
(See  Annex  13)  and  labour  force  (from  4th  to 
16th).  Measures in  these specific  areas  will  boost 
Sweden’s economic strength and competitiveness.  

Graph A12.1: Labour productivity 

sector,  and  the  information  and  communication 
sector) did grow in 2022 (see Graph A12.1). 

level  of  134.5% 

Sweden  is  an  innovation  leader,  with  a 
performance 
the  EU 
average,  but  has  lost  the  top  innovator 
position.  According  to  the  Innovation  Scoreboard 
2023 (106) ,  Sweden’s  performance 
level  has 
increased by 10 percentage points since 2016, at 
a  higher  rate  than  the  EU’s    (8.5%)  (See  Annex 
11).This strength lies in human resources (in 2023, 
Sweden had a performance level of 183.5 relative 
to  the  EU  baseline  of  100),  the  attractiveness  of 
the research system (176.0 vs 100) and the use of 
information technologies (180.4 vs 100). However, 
there are areas for improvement: fostering job-to-
job  mobility  of  human  resources  in  science  and 
technology  (41.7  vs  100),  boosting  non-R&D 
innovation expenditure (73.1 vs 100) and providing 
greater  government  support  for  business  R&D 
(76.5  vs  100).  Efforts  in  these  areas  will  help 
boost  Sweden’s  innovation  leadership  (see  Annex 
11). 

Source: Eurostat 

labour  productivity  per  person 

Sweden’s  labour  productivity  (as  expressed 
in  GDP  per  person  employed)  was  the  sixth 
highest  in  the  EU  in  2022 (103).  However,  in 
2023  real 
in 
industry  (104)  declined  by  -5.5%  (year-on-year), 
compared  to  1.24%  decrease  in  EU  average). 
Industry  contributed  23.7%  (105)  to  Sweden’s  GDP 
in  2022,  so 
in 
productivity could have a significant impact on the 
Swedish  economy.  This  decline  can  be  attributed 
to  significant  contractions  in  the  construction 
sector. 
the  non-tradable  sector 
(financial, 
insurance,  arts,  entertainment  and 
recreation  activities)  has  not  grown,  whereas 
manufacturing,  market 
(retail  and 
administrative  services)  and  tradable  sectors 
the  automotive 
(agriculture,  forestry,  fishing, 

this  negative  performance 

In  addition, 

services 

(102) IMD World Competitiveness Sweden 

(103) Eurostat. Labour productivity per person employed and hour 

worked (EU27_2020=100)  

(104)Eurostat. Real labour productivity per person in industry  

(105) Statista: Sweden- Distribution of gross domestic product 
(GDP) across economic sectors from 2012 to 2022 

On  digitalisation,  Sweden  has  performed 
robustly  but  not  progressed  as  fast  as 
previously.  According  to  the  2022  edition  of  the 
Digital  Economy  and  Society  Index  (DESI) (107)), 
Sweden  holds  the  fourth  position  in  the  ranking. 
Sweden’s  digital  strength  is  based  on  its  human 
capital. However, there are areas for improvement, 
such  as  5G  coverage,  where  according  to  July 
2021 data, Sweden (at 18 % of populated  areas) 
scores  significantly  lower  than  the  EU  average 
(66%)  .  As  well  55.1%  of  firms  report  challenges 
in  filling  vacancies  of  ICT  professionals.  Targeted 
measures  in  these  specific  domains  will  help 
Sweden keep its position as a digital front runner. 
On a positive note, Swedish firms are increasingly 
adopting  digital  technologies  and  Sweden  here 
ranks third in the EU. This success is attributed to 
robust  collaboration  between  academia  and  the 
business sector, particularly in artificial intelligence 
high-performance 
(AI), 
computing and quantum computing. Sweden leads 
on several digital technology integration indicators 
but aims to go further still by encouraging to more 
firms  to  use  big  data  and  AI  to  meet  the  digital 
decade target of a 75% uptake by 2030. 

computing, 

cloud 

(106)European Innovation Scoreboard Sweden.pdf 

(107) Sweden in the Digital Economy and Society Index 

52 

90100110120130201820192020202120222023Agriculture, forestry and fishingIndustry (except construction)ConstructionWholesale and retail trade, transport, accommodation and food service activitiesInformation and communicationFinancial and insurance activitiesProfessional, scientific and technical activities; administrative and support service activities 
 
        
 
 
 
 
Sweden  has  performed  solidly  within  the 
EU’s single market, but there is still room for 
improvement  (108). In 2023, the number of non-
transposed  EU  directives  was  lower  than  the  EU 
average  (0.5%  vs  0.7%)  and  the  number  of 
incorrectly  transposed  directives  was  also  below 
average (0.8% vs 1.1%). Sweden performs well on 
public  procurement,  with  a  lower  percentage  of 
single  bids  than  the  EU  average  (11%  vs  28.6%) 
and  fewer  direct  awards  (1%  vs  8.1%).  The 
number of pending infringements is likewise lower 
than  the  EU  average  (19  vs  25.9).  Despite  these 
trade 
positive  aspects,  Sweden’s 
integration in the single market is less than the EU 
average,  so 
further 
improvement  in  various  areas  to  ensure  more 
robust  and  effective  integration  into  the  single 
market.  Sweden  solved  69%  of  the  SOLVIT  cases 
(70)  it  handled  as  lead  centre  (below  the  EU 
average  of  88.3%).  However,  many  of  the 
unresolved  cases  are  due  to  a  systemic  issue 
related 
the 
population  register  and  obtaining  the  personal 
identification number that is necessary in order to 
gain access to certain essential public  and private 
services.  Its  resolution  rate  without  these  cases 
would have been 85.9%.  

to  difficulties 

is  potential 

registering 

level  of 

there 

for 

in 

in 

and 

0.17) 

peers 

Favourable  conditions  for  access  to  finance 
are  contributing  to  a  conducive  business 
environment.  Equity  (109)  is  widely  distributed 
and in 2022 exceeded both the EU  average (0.72 
vs 
and 
Denmark: 0.20).  Furthermore,  a  lower  percentage 
of  companies  than  the  EU  average  seek  external 
financing  (0.45  vs  0.49)  (110).  In  addition,  the 
proportion of SMEs facing late payments is below 
the  EU  average (44.5%  vs  48.7%).  These  positive 
indicators  reflect  a  supportive  and  advantageous 
framework for businesses operating in Sweden.  

(Finland: 0.34 

Sweden’s  industrial  strategy  prioritises  jobs 
and  skills.  According  to  the  OECD  Industrial 
Strategy Fact Sheet  (111), industry in Sweden relies 
less  on  grants  and  tax  expenditures  and  more  on 
loans  and 
financial 

instruments 

such  as 

prioritises 

jobs  and 

It 
thus  showing  commitment 

guarantees. 
skills 
to 
development, 
workforce. Moreover, support is mainly directed to 
the transport, real estate and information sectors, 
thus  demonstrating  a  strategic  allocation  of 
resources.  

Sweden  is  at  the  forefront  of  industry 
decarbonisation  (as  indicated  by  its  high 
ranking in the Net Zero Readiness Index  (112)). 
Northern  Sweden  plays  a  key  role  in  industry’s 
sustainable  transition,  with  a  large  part  of  the 
fossil-free energy production and digital industrial 
projects  (fossil-free  steel  projects  HYBRIT  and 
H2GS),  fossil-free  iron  ore  mining  (LKAB  and 
Kaunis Iron), battery giga-factories (Northvolt), and 
green  and  emission-free  ammonia  and  fertiliser 
(Fertiberia)).  Furthermore,  Sweden  is  one  of  the 
leading  mining  nations  in  the  EU  in  iron,  zinc, 
copper,  lead,  silver,  gold  and  industrial  minerals 
(mainly  limestone)  (113).  Sweden  also  has  mineral 
potential  for  several  critical  metals  (including 
rare-earth elements (REE), graphite, lithium, cobalt, 
nickel,  platinum  group  metals,  tungsten,  indium, 
phosphorus and vanadium) that are needed in the 
production  of  batteries  (see  Annex  7).  Improving 
the  refining,  processing  and  recycling  of  Swedish 
critical raw materials  (114) will boost this process.  

More could be done to reduce constraints on 
firms  related  to  material  shortages  and 
vacancy  rates.  In  2023,  both  the  percentage  of 
firms facing constraints related to material supply 
and  the  vacancy  rate  were  higher  than  the  EU 
average  (35.4%  vs  17.2%)  (115)  and  (2.7%  vs 
2.5%)  (116). Education is also in decline (as shown 
by  the  increasing  share  of  15-year-olds  with 
inadequate  basic  skills  and  the  decreasing  share 
of  top  performers  in  PISA  2022).  Nearly  one  in 
three  students  does  not  reach  a  minimum 
proficiency  level  in  mathematics,  and  this  share 
has  increased  by  8.4  percentage  points  since 
2018. Nearly half of students with disadvantaged 
(see 
and  migrant  backgrounds  underperform 
Annex 15). 

(108) Single market scoreboard. Sweden 

(109) EIF Access to finance index - Equity, Composite: VC/GDP, 

IPO/GDP, SMEs using equity, index values between 0 and 1. 

(110) EIF Access to finance index - Loan, Composite: SME external 
financing over last 6 months, index values between 0 and 1. 

(112) Net zero readiness index. KPMG 

(113) Swedish Geological Survey, Statistics of the Swedish Mining 

Industry 

(114) Critical Raw Materials Act: EU Critical raw materials act  

(115) ECFIN BCS. 

(111) Quantifying Industrial Strategy: Sweden Factsheet OECD. 

(116) Eurostat. 

53 

 
 
 
Graph A12.2: Material shortages 

Source: Eurostat 

the  system  will  enable 

Sweden  is  in  the  intermediate  stage  of 
implementing  the  components  needed  to 
connect  to  the  Once-Only  Technical  System 
(OOTS) (117). As part of the Single Digital Gateway 
Regulation  (118), 
the 
automated  cross-border  exchange  of  evidence 
between  competent  authorities,  improving  online 
access  to  information,  administrative  procedures 
and  assistance  within  the  EU.  The  onboarding  of 
Swedish  competent  authorities  is  crucial  for  the 
system  to  function  smoothly  and  to  reduce 
administrative burden. 

(117) OOTS Commission Implementing Regulation (EU) 2022/1463   

(118) Single Digital Gateway Regulation: Single Digital Gateway 

Regulation 2018/1724 

54 

051015202530354045CyprusRomaniaEstoniaGreecePortugalLithuaniaLuxembourgHungaryBulgariaCroatiaLatviaAustriaSpainFinlandSlovakiaPolandSloveniaItalyBelgiumNetherlandsMaltaDenmarkEU-27FranceCzechiaSwedenGermanyIrelandmaterial shortageEU-27 average5-year average 
        
 
 
 
Table A12.1:Industry and the Single Market 

Source: (1) AMECO, (2) Eurostat, (3) Single Market Scoreboard, (4) OECD, (5) ECFIN BCS, (6) COMEXT and Commission 
calculations, (7) EIB Investment Survey, (8) Intrum Payment Report, (9) SAFE survey, (10) EIF SME Access to Finance Index 
* Own Commission calculations for the EU27 average 

55 

POLICY AREAINDICATOR NAME20192020202120222023EU27 average*Net Private investment, level of private capital stock, net of depreciation, % GDP15,75,86,97,96,63,8Net Public investment, level of public capital stock, net of depreciation, % GDP11,71,71,51,41,51,2Real labour productivity per person in industry (% yoy)20,8-0,511,50,4-5,5-1,24Cost competitivenessNominal unit labour cost in industry (% yoy)2-1,42,7-1,5-2,31,59,83Single Market integrationEU Trade integration, % (Average intra-EU imports + average intra EU exports)/GDP225,723,525,529,130,042,9Transposition deficit, % of all directives not transposed30,70,720,70,50,7Conformity deficit, % of all directives transposed incorrectly31,61,611,10,81,1SOLVIT, % resolution rate per country378,462,770,668,369,088,3Number of pending infringement proceedings3212324181925,9RestrictionsEEA Services Trade Restrictiveness Index40,040,040,040,040,040,05Single bids, % of total contractors38910131128,6Direct Awards, %3001118,1Material Shortage (industry), firms facing constraints, %520,210,625,354,735,417,2Labour Shortage using survey data (industry), firms facing constraints, %56,13,38,317,613,423,3Vacancy rate, % of vacant posts to all available ones (vacant + occupied)22,451,82,53,22,72,5Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials60,170,170,150,180,260,22Installed renewables electricity capacity, % of total electricity produced20,60,70,70,750Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle711,17,69,210,010,022,2Bankruptcies, Index (2015=100)2-----105,6Business registrations, Index (2015=100)2-----120,2Payment gap - corporates B2B, difference in days between offered and actual payment8-1915121615Payment gap - public sector, difference in days between offered and actual payment8-1813131516Share of SMEs experiencing late payments in past 6 months, %932,529,235,231,744,548,7EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1100,610,480,410,45-0,49EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values between 0 and 110 0,870,941,000,72-0,17SwedenHEADLINE INDICATORSEconomic StructureSINGLE MARKETCompliancePublic procurement ECONOMIC STRUCTUREShortagesStrategic dependenciesBUSINESS ENVIRONMENT - SMEsBusiness demographyLate paymentsAccess to finance 
 
  
 
ANNEX 13: PUBLIC ADMINISTRATION 

Sweden’s  public  administration  is  essential 
for  the  economy’s  competitiveness  by,  in 
particular,  shaping  the  conditions  for  the 
twin  transitions  and  creating  a  favourable 
business  environment.  It  continues  to  have  a 
high level of perceived effectiveness; however, the 
overall  score  has  been  slightly  decreasing  since 
2018.  Despite  changes  in  government,  several 
ongoing  reform  initiatives  are  still  a  priority,  such 
as  digitalisation  and  better  coordination  between 
different  levels  of  government  and  policy  areas. 
Other 
inquiries 
addressing  unauthorised  influence  and  corruption, 
were discontinued. The government’s new priorities 
concern  the  structure  of  the  public  administration 
system,  the  civil  service  and  requirements  for 
transparency and accountability (119). 

such  as  public 

initiatives, 

Graph A13.1: Government effectiveness 

Average value over 2018-2022 and change over 2018-2022. 
The GDP per head bar shows the mean value of the 
government effectiveness indicator for the group of EU 
countries belonging to the same GDP per head cluster as 
Sweden (EU countries are ranked in terms of their GDP per 
head and grouped into three equally sized clusters). 
Source: Worldwide Governance Indicators 

is  good  regulatory  governance 

There 
in 
Sweden.  The  legislative  process  relies  heavily  on 
evidence-informed  policymaking,  with  public 
inquiries  and  consultations  for  all  major  reform 
initiatives.  However,  the  latest  report  of  the 
National  Audit  Office  concluded  that  most  major 
reforms  between  2000  and  2017  had  significant 
shortcomings  in  their  design  and  results  and  that 

(119) European Commission, DG REFORM, Public administration 

and governance: Sweden, Publications Office of the EU, 2024 
(forthcoming). 

there  was  no  established  process  for  systematic 
ex  post  evaluation (120).  In  response  to  these 
findings, the government proposed new measures, 
including a new regulation on impact assessments. 

to 

an 

the 

internet 

possibilities 

inquiry 
for 

is  an  early  adopter  of  digital 
Sweden 
services and a promoter of e-governance (121). 
Data on the use of digital services indicate that e-
governance  performance  continues  to  improve. 
This follows a short decline in 2020 as a result of 
the  impact  of  COVID-19  on  services.  Most  people 
interact  with  public 
use 
authorities (122).  A  public 
is  currently 
examining 
electronic 
identification system, which up until now depended 
on  private  providers  and  raised  data  protection 
concerns.  Sweden  is  an  early  adopter  of  artificial 
in  public  administration.  The 
intelligence  (AI) 
Agency 
leading 
cooperation  efforts  between  public  agencies,  and 
support 
the 
municipalities  in  using  AI  technologies.  According 
to  a  joint  report  of  several  public  agencies 
published  in  January  2023,  the  use  of  AI  is 
tasks  of  public 
expected 
administration  employees,  but  not  public  sector 
employment (123). 

for  Digital  Government 

government 

to  affect 

plans 

also 

the 

to 

is 

A13.1). 

The capacity and quality of the Swedish civil 
service  is  high.  Sweden  is  among  the  best-
performing  countries  on  gender  parity  in  senior 
civil service management positions, although it has 
slightly  decreased (124).  The  age  structure  of  the 
civil service is younger than that of the EU average 
(Table 
public 
administration  employees  in  adult  training  is 
significantly  higher  than  the  EU  average  and  is 
actively encouraged. In July 2023, the government, 
in collaboration with the Swedish Agency for Public 
Management,  launched  an  introductory  training 
programme  for  civil  servants,  designed  to  help 
them  manage  the  duties  and  obligations  of  their 
role. 

Participation 

of 

(120) Riksrevisionen, 2022, https://www.riksrevisionen.se/en.html. 

(121) European Commission, State of Digital Decade, 2023. 

(122) Eurostat, ICT use survey, 2023. 

(123) Agency for Digital Government, 2023, 
https://www.digg.se/analys-och-
uppfoljning/publikationer/publikationer/2023-01-23-
slutrapport-uppdrag-att-framja-offentlig-forvaltnings-
formaga-att-anvanda-artificiell-intelligens. 

(124) European Institute for Gender Equality, 2023. 

56 

-0.20.00.20.40.60.81.01.21.41.61.8SEEU-27GDP perhead clusterChange 2018-2022Average 2018-2022 
 
   
 
 
 
Table A13.1:Public administration indicators 

(1) High values denote a good performance, except for indicator # 6. (2) 2023 value. If unavailable, the latest value available 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: E-government activities of individuals via websites, 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). 

independence, no systemic deficiencies have been 
reported (125). 

The  justice  system  is  efficient,  and  its 
digitalisation  is at  an  overall good level.  The 
time  needed  to  resolve  administrative  cases  at 
first  instance  in  2022  was  107  days  and  is 
comparatively  low  among  Member  States.  The 
clearance rate remains stable and positive for civil 
and  commercial  litigious  cases  (at  103%  in  2021 
and  102%  in  2022)  and  for  administrative  cases 
(at  103%  in  2021  and  2022).  The  level  of 
digitalisation  is  overall  good.  In  particular,  digital 
tools  are  widely  used  in  courts,  including  an 
electronic  case  management  system,  technology 
for  distance  communication  and  a  secure  remote 
work environment for judges and staff. Some gaps 
exist in the arrangements  for producing machine-
readable  judgments,  digital  solutions  to  conduct 
and follow criminal proceedings, or accessing first 
judicial 
instance  court 

judgments  online.  On 

(125) For a more detailed analysis of the performance of the 

Swedish justice system, see the 2024 EU Justice Scoreboard 
(forthcoming) and the country chapter on Sweden in the 
Commission’s 2024 Rule of Law Report (forthcoming). 

57 

SE20192020202120222023EU-27(2)1n/an/an/a95.896.475.02n/a75.473.676.781.875.830.60.80.80.80.80.8471.572.873.4 (b)72.872.752.9542.433.639.9 (b)43.246.717.960.60.62.23.45.09.271.81.91.8 (b)1.82.01.580.80.80.80.8n/a0.791.61.61.61.6n/a1.410n/an/a1.66n/an/a1.7Strength of fiscal rules indexEvidence-based policy makingRegulatory governanceMedium-term budgetary framework indexIndicator (1)E-government and open government dataShare of internet users within the last year that used a public authority website or appE-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with higher 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  
 
 
 
     
 
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 the EU headline and national targets for 2030 
on employment, skills, and poverty reduction. 

Table A14.1:Social Scoreboard for Sweden 

gap  of  13.8  pps,  considerably  above  the  EU 
average of 9.3 pps. The difference between people 
born  in  Sweden  and  those  born  outside  the  EU  is 
even  bigger  for  women,  even 
the 
employment rate of women born outside the EU is 
above  the  EU  average.  The  Swedish  European 
Social  Fund  Plus  (ESF+)  programme  specifically 
aims to activate those people who are still furthest 
away  from  the  labour  market,  including  persons 
with disabilities, newly arrived migrants and long-
term unemployed people. 

though 

long-term  unemployment,  there 

There  are  high  levels  of  unemployment  and 
labour  market  slack  in  Sweden.  In  2023,  the 
unemployment  rate  (7.7%)  remained  was  higher 
than  the  EU  average  (6.1%).  Labour  market 
slack (126)  reached 16.4% in 2023, well above the 
EU  average of 12%. Youth unemployment (15-24 
age  group)  remained  high,  at  22.1  %  in  2023, 
slightly on the rise from 2022. This is significantly 
above the EU average of 14.5% in 2023. When it 
is 
comes  to 
another wide gap between people born in Sweden 
and  those  born  outside  the  EU.  The  proportion  of 
Swedish-born  unemployed  people  (15-74  age 
group)  who  had  been  unemployed  for  more  than 
12 months was 12.1% in 2023, against 33.4% for 
those born outside the EU. For the EU as a whole, 
people  born  outside  the  EU  are  less  likely  to  be 
long-term unemployed compared to native-born in 
the  EU  (33.3%  vs  35.9%,  respectively).  The 
Swedish  public  employment  services  have  gone 
through a reform in recent years, which includes a 
re-structuring  of  the  active  labour  market  policy 
(ALMP) 
the 
concentration of resources on job seekers who are 
harder  to  place  has  been  maintained. However, 
Sweden  still 
in  matching 
faces  challenges 
jobseekers with available job vacancies. 

system.  During 

reform 

the 

There  are  also  wide  gaps  in  education  and 
skills  between  people  born  outside  the  EU 
and  those  born  in  Sweden.  While  the  share  of 
early  leavers  from  education  or  training  (18-24 
age  group)  is  below  the  EU  average  in  all 
categories,  there  is  a  wide  gap  between  young 
people born in Sweden and those born outside the 

(126) Labour market slack refers to all unmet needs for 

employment, namely it represents the extent to which labour 
supply exceeds labour demand in the short term. 

58 

Update of 25 April 2024. Members States are categorised 
based on the Social Scoreboard according to a methodology 
agreed with the EMCO and SPC Committees. Please consult 
the Annex of the Joint Employment Report 2024 for details on 
the methodology. 
Source: Eurostat. 

The  labour  market  in  Sweden  is  performing 
well  overall,  but  significant  challenges  to 
integrating  people  born  outside  the  EU.  The 
employment rate remains one of the highest in the 
EU,  at  82.6%  in  2023  (EU:  75.3%).  However, 
Sweden  still  faces  difficulties 
integrating 
vulnerable  people  into  the  labour  market.  The 
disability employment gap widened in 2022 to be 
once more above the EU average (25.7 percentage 
points (pps) in Sweden vs 21.4 pps in the EU). Also, 
the  employment  rate  of  people  born  outside  the 
EU in 2023 was much lower, at 71.7%. While this 
is above the EU average of 67%, it is significantly 
below  that  of  people  born  in  Sweden,  which  was 
85.5%  in  2023.  This  represents  an  employment 

in 

66.57.466.45.74.74.482.67.71.6121.618.619.939.8525.79.154.41.8Critical situationTo watchWeak but improvingGood but to monitorOn averagePolicy areaHeadline indicatorEqual opportunities and access to the labour marketAdult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Early leavers from education and training(% of  the population aged 18-24, 2023)Share of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2023)Young people not in employment, education or training(% of the population aged 15-29, 2023)Gender employment gap(percentage points, population aged 20-64, 2023)Income quintile ratio (S80/S20, 2022)Dynamic labour markets and fair working conditionsEmployment rate(% of the population aged 20-64, 2023)Unemployment rate(% of the active population aged 15-74, 2023)Long term unemployment(% of the active population aged 15-74, 2023)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2022)Social protection and inclusionAt risk of poverty or social exclusion (AROPE) rate (% of the total population, 2022)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2022)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2022)Disability employment gap (percentage points, population aged 20-64, 2022)Housing cost overburden (% of the total population, 2022)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2022)Self-reported unmet need for medical care (% of the population aged 16+, 2022)Better than averageBest performers 
 
 
 
     
 
 
 
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, special extraction excl. guided on-the-job training. 
(2) Change in the number of persons at risk of poverty or 
social exclusion (AROPE), reference year 2019. 
Source: Eurostat, DG EMPL. 

income 

inequality 

Poverty  and 
have 
increased. The share of people at risk of poverty 
or  social  exclusion  increased  in  2022,  after  a 
decrease  in  2021.  For  adults  (18  and  over),  it 
stood  at  18.6%  in  2022,  the  highest  figure  ever 
recorded  in  Sweden,  although  still  below  the  EU 
average  of  21.6%.  Notably,  in  2022  there  was  a 
large  gap  between  people  born  in  Sweden  and 
those  born  outside  the  EU  (13.5%  vs  38%, 
respectively),  slightly  above  the  EU  averages 
(18.8%  vs  40%).  Income  inequality,  measured  by 
the ratio between the earnings of the fifth and the 
first  quintile  of  the  income  distribution,  also 
increased in 2022, after falling in 2021. The ratio 
was  the  highest  it  has  ever  been  for  Sweden  in 
2022  (4.36),  and  only  slightly  below  the  EU 
average  (4.7).  The  Swedish  ESF+  programme  will 
invest about EUR 21 million to help reduce the risk 
of  financial  vulnerability  and  contribute  to  an 
inclusive  society.  Further  efforts  are  needed  to 
reach the 2030 national poverty target of reducing 
the number  of  people  at  risk  of  poverty  or  social 
exclusion by at least 15 000 compared to 2019. 

EU  (6.4%  vs  12.2%,  respectively,  in  2023).  It 
should  however  be  noted  that  early  leavers  are 
defined  as  individuals  who  have  completed  at 
most a lower secondary education and were not in 
further education or training during the four weeks 
preceding  the  Eurostat  survey.  The  rate  of  young 
people  not  in  employment,  education,  or  training 
(NEETs)  (15-29  age  group)  remains  significantly 
below  the  EU  average  (5.7%  vs  11.2%  in  2023). 
However, in this area there is also a gap between 
young  people  born  in  Sweden  and  those  born 
outside  the  EU:  5.0%  vs  8.4%  in  2023.  The 
Recovery and Resilience Facility has contributed to 
establishing  new  places 
regional  adult 
vocational  education  which,  together  with  related 
reforms  sum  up  to  more  than  68 000  new  study 
places, for individuals with the greatest education 
needs.  

in 

is  characterised  by 

Skills mismatches have decreased in a labour 
labour 
market  that 
shortages greater than before the COVID-19 
pandemic. The percentage of employers reporting 
that  labour  shortages  are  a  factor  limiting  their 
production remain higher than their pre-pandemic 
levels  in  industry  and  services  (12%  in  industry, 
23%  in  services  in  October  2023),  despite  having 
fallen  since  their  peak  in  2022.  Nevertheless, 
these  rates  are  lower  than  the  respective  EU 
averages. Yet the job vacancy rate, albeit falling to 
2.8%  in  2023,  slighlty  above  the  EU  average 
(2.7%).  Together  with  the  lagging  labour  market 
integration  of  some  groups,  labour  shortages  and 
skills  mismatches  also  undermine  Sweden’s 
potential to improve its economic competitiveness. 
The  macroeconomic  skills  mismatch (127)  has 
slightly decreased since 2020, and it remains at a 
relatively  low  level  (16.7%  in  2022),  due  to  a 
reduction  in  the  gap  between  the  employment 
rates of workers with different educational  levels. 
The  skills  mismatch  of  younger  workers  (15-29 
age  group)  has  decreased,  despite  remaining  the 
highest  among  the  age  groups  of  the  working 
population and above the general skills mismatch. 

(127) The macroeconomic skills mismatch measures the dispersion 
of employment rates across three skill groups (proxied by 
education levels, with ISCED 0-2 = low skills; 3-4 = medium 
skills and 5-7 = high skills).  If there is a big discrepancy 
between the employment rates of the high, medium, and 
low-skilled, this suggests that there is a large gap between 
the skills that the population has and the skills that the 
economy needs. 

59 

IndicatorsLatest dataTrend            (2016-20232030 targetEU target 82.6(2023)66.5(2022)532023Poverty reduction2 (thousands)-15-15 000Employment (%)8278Adult learning1 (%)6060 
 
 
   
 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  of 
Sweden’s  education  and  training  system 
based on the 2023 Education and Training Monitor 
and  the  2022  OECD  Programme  for  International 
Student Assessment (PISA) results. 

Basic  skills  have  deteriorated  since  2018, 
with  increasing  underachievement  rates  and 
decreasing top performance. Recent reversal of 
the  positive  PISA  trends  2012-2018 
led  to 
underachievement  comparable  to  2012  levels. 
Increase  has  been  largest  in  mathematics  with 
8.4 pps (EU 6.6 pps), leading to a rate of 27.2% (vs 
EU 29.5%), above the EU target of under 15%. The 
increase was also significant in reading (5.9 pps vs 
EU  3.7 pps).  The  share  of  top  performers  in 
mathematics decreased by 2.6 pps (falling to 10% 
vs EU 7.9%), and in reading by 3.1 pps (to 10.2% 
vs EU 6.5%) (128). The COVID pandemic might have 
impacted  results  less  than  in  other  countries  as 
schools  in  Sweden  were  largely  kept  open.  Only 
15%  of  students  reported  their  school  being 
closed  for  more  than  3  months.  However,  the 
in 
persistent  shortage  of  qualified  teachers 
schools  may  impact  on  quality  (see  below).  While 
students still perform better than the EU average, 
negative 
future  skills 
development  and  competitiveness  due  to  the  less 
solid  foundation.  The  decline  in  the  share  of  top 
performers  represents  a  risk  for  the  innovation 
capacity of the country. 

trends  may  hamper 

risk 

increase 

the 
Students 

Low  socio-economic  status  and  migrant 
of 
background 
underperformance. 
from 
disadvantaged  backgrounds  are  more  likely  to 
underperform 
in  mathematics  compared  with 
those  from more  affluent  backgrounds  (44.4%  vs 
10.9%). The share of disadvantaged students who 
underperform  also  increased  more  strongly  since 
2018  (11.7 pps  vs  2.6 pps  for  the  advantaged), 
leading 
to  a  widening  socio-economic  gap 
(33.5 pps). Similar gaps exist in reading (29.7 pps) 
the 
and 
performance  gap  between  native-born  students 
and  foreign-born  students  is  32.2 pps,  one  of  the 
highest  in  the  EU,  and  remains  high  for  migrant 
background students born in the country (20.2 pps) 
(see  Graph  A15.1).  The  gap  in  the  performance 

(30.3 pps).  Worryingly, 

science 

remains  significant 
(27  score  points)  after 
accounting  for  socio-economic  background  and 
language spoken at home. 

Graph A15.1: Underachievement in mathematics in 
Sweden by country of birth, PISA 2022 

Source: OECD (2023). 

of 

the 

the 

language 

Knowledge 
affects 
educational  results  particularly  strongly  in 
in 
to 
Sweden.  According 
International Reading Literacy Study (PIRLS) 2021, 
the  reading  performance  of  children  who  only 
sometimes  speak  the  language  of  the  test  at 
home is 50 points lower than of those who always 
speak  it,  corresponding  to  more  than  1 year  of 
teaching (129), the highest such gap in PIRLS 2021. 

Progress 

Qualifying for upper secondary education is a 
challenge  and  more  difficult  for  students 
with  migrant  background.  In  2022,  15%  of  all 
the  students  had  compulsory  school  grades  too 
low  to  qualify  for  the  national  upper  secondary 
education  programme.  Students  with  migrant 
background who arrive in the country after starting 
school  are  much  less  likely  to  qualify  (66.8%  of 
those  arriving  in  the  first  5  grades,  and  32%  of 
those arriving in the last 4 grades, of compulsory 
school  qualify,  vs 89.5% for the native-born). Not 
speaking the language of tuition and a low socio-
economic and/or education background of parents 
have  a  negative  impact  on  results.  They  are  also 
underrepresented  in  independent  schools,  whose 
pupils have better chances of qualifying for upper 
secondary  (91.6%  vs  83.3%  for  those  from 
municipal schools), partly also linked to the profile 
of  students  attending  municipal  or  private 

(128) OECD (2023), PISA 2022 Results (Volume I): The State of 
Learning and Equity in Education, PISA, OECD Publishing, 
Paris, https://www.oecd.org/publications/pisa-2022-results-
volume-i-53f23881-en.htm. 

(129) European Commission (2023), Children’s reading competence 
and well-being in the EU: an EU comparative analysis of the 
PIRLS results, Publications Office of the European Union, 
2023, https://data.europa.eu/doi/10.2766/820665. 

60 

0102030405060TotalNative-bornstudentsNative-bornstudents withforeign-bornparentsForeign-bornstudents%EU 2030 target 
 
 
  
 
 
 
Table A15.1:EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Notes: b = break in time series; d = definition differs; e = estimated; p = provisional; u = low reliability; : = data not available. 
Source: 1,3,4,5,7,8,9,10,12=Eurostat; 11= Eurostat, Adult Education Survey; 2,6=OECD, PISA. 

schools (130). In 2023, early leaving from education 
and  training  was  7.4%,  below  the  EU  average  of 
9.5%. 

vocational education and training (VET), a doubling 
in the number of students studying to become VET 
teachers is needed (133). 

It 

is  particularly  high 

Shortage of qualified teachers exists at most 
levels  of  education,  with  regional  and  local 
in  early 
variations. 
childhood  education  and  care  (ECEC),  where  only 
41% of ECEC teachers are qualified (with regional 
variations  between  30%  and  54% (131)  and 
municipal between 22% and 75%).  In compulsory 
schools  in  2022-2023,  only  70.8%  of  teachers 
were qualified in at least one of their subjects, and 
in upper-secondary 83.4%. Municipal schools have 
in  compulsory 
more  qualified  teachers,  both 
(71.8%  vs  independent  63.9%)  and  in  upper 
secondary  schools  (86.7%  vs  75.7%) (132). 
In 

Participation  in  ECEC  is  high,  and  staff  are 
provided  with  targeted  language  training.  In 
2021, the participation rate of children older than 
3  years  was  96.1%  vs  EU  92.5%.  Since  autumn 
2022, the National  Agency for Education provides 
Swedish courses for ECEC staff (134). 

Tertiary  education  attainment  is  high.  In 
2023, it was 54.1% vs EU 43.1%. It has increased 
by  1.7 pps  from  2022,  and  by  8.1 pps  in  the  last 
decade.  The  employment  rate  of  recent  higher 
education  graduates  (aged  20–34)  in  2022  was 
92.1% (EU: 86.7%.)  

(130) National Agency for Education (2022), Slutbetyg i 

grundskolan, Våren 2022, Beskrivande statistik Stockholm, 
Skolverket. https://www.skolverket.se/getFile?file=10334 

(131) Databasen Jämförelsetal - Skolverket (artisan.se): 
https://jmftal.artisan.se/databas.aspx#tab-0. 

(132) National Agency for Education (2023), Pedagogisk personal i 
skola och vuxenutbildning. Läsåret 2022/23. Beskrivande 
statistik Stockholm, Skolverket. 

(133) Cedefop (2023), Vocational education and training in 

Sweden: short description, Luxembourg: Publications Office, 
http://data.europa.eu/doi/10.2801/800830. 

(134) https://www.skolverket.se/skolutveckling/anordna-och-
administrera-utbildning/anordna-utbildning-inom-
komvux/relaterade-lankar/spraktraning-for-anstallda-i-
valfarden/spraktraning-for-anstallda-i-forskolan 

61 

96%95.0%201391.8%201395.1%92.2%96.1%202192.5%2021,dReading< 15%22.7% 18.0%18.4% 22.5%24.3%202226.2%2022Mathematics< 15%27.1% 22.1%18.8%22.9%27.2%202229.5%2022Science< 15%22.2% 16.8%19.0%22.3%23.7%202224.2%2022< 9 %7.5% 12.6%7.5%b10.5%7.4%9.5%Men8.5%14.5%8.8%b12.1%8.6%11.3%Women6.3%10.6%6.0%b8.7%6.2%7.7%Cities6.4%b11.2%5.6%b9.4%5.9%8.6%Rural areas8.9%b14.0%9.2%b11.0%10.4%9.9%5By country of birthNative6.7% 11.3%5.5%b9.2%6.4%8.2%EU-born9.8%u26.2%8.6%bu22.4%:u21.0%Non EU-born13.2%30.1%17.2%b23.0%12.2%21.6%6Socio-economic gap (percentage points)28.1:24.429.533.5202237.220227Exposure of VET graduates to work-based learning≥ 60% (2025) ::: :65.7% 64.5%45%43.5% 34.1%47.6%#N/A38.7%54.1%43.1%Men37.2% 29.1%40.4%b33.3%46.8%37.6%Women50.2% 39.2%55.1%b44.2%61.9%48.8%Cities53.1%b43.5%60.2%b49.0%66.1%53.3%Rural areas30.6%b24.8%31.8%b27.7%37.7%31.7%Native44.5%35.4%47.7%b39.7%55.6%44.2%EU-born56.3%29.3%63.5%b36.7%68.3%40.2%Non EU-born37.2%#N/A24.2%43.8%b31.0%46.2%37.1%11Participation in adult learning (age 25-64)≥ 47% (2025) ::58.8%201637.4%201666.5%202239.5%202228.8%201322.7%201325.3%23.8%24.8%202124.5%2021201220182023IndicatorTargetSwedenEU-27SwedenEU-27SwedenEU-271Participation 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 urbanisationTertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth12Share of school teachers (ISCED 1-3) who are 55 years or over 
 
 
 
   
 
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. 

the 

system 

circulatory 

Life  expectancy  in  Sweden  remains  among 
the  highest  in  the  EU.  In  2022,  life  expectancy 
at  birth  in  Sweden  was  among  the  highest  in  the 
EU,  at  83.1  years,  rebounding  to  pre-pandemic 
levels following a reduction in 2020. This rebound 
reflects  the  lower  COVID-19  mortality  in  Sweden 
in  2021  and  2022  compared  to  2020 (135).  In 
2021,  the  leading  causes  of  death  were  diseases 
of 
(‘cardiovascular 
diseases’)  followed  by  cancer,  and  Alzheimer’s 
disease  and  other  forms  of  dementia.  Compared 
to other EU countries, Sweden had very low rates 
of  mortality  from  preventable  and  treatable 
causes  in  2021.  These  point  to  the  effectiveness 
of  the  public  health  and  healthcare  system  in 
preventing  deaths  from  such  conditions.  The  low 
rate of preventable mortality is largely due to low 
rates  of  premature  deaths  from  lung  cancer  and 
cardiovascular  diseases.  A  specific  cause  for 
concern is Sweden’s comparatively high death rate 
due  to  suicide.  Suicide  rates  have  decreased  in 
Sweden  since  2005,  but  remain  above  the  EU 
average for women. 

real 

extent – by a growth in GDP in 2021 following an 
initial  contraction  in  2020  at  the  onset  of  the 
COVID-19  pandemic. 
terms,  health 
In 
spending in Sweden increased by 11% from 2020 
to  2021.  Provisional  data  suggest  that  in  2022 
total  health  spending  fell  back  to  10.6%  of  GDP. 
Public  expenditure  on  health  as  a  proportion  of 
current  health  expenditure 
fell  slightly  by 
0.3 percentage points (pps) to 85.9% in 2021, but 
remained  well  above  the  EU  average  of  81.1%. 
The largest share of health spending in Sweden in 
2021  (around  a  third)  was  for  outpatient  care 
(including  home  care),  which  is  much  higher  than 
the  respective  average  share  across  the  EU. 
Inpatient  care  accounted  for  around  23%  of  total 
healthcare  spending  in  2021.  This  represents  a 
marked  decline  since  2010,  when  the  budget 
share held by inpatient care stood at around 27%. 
Based  on  the  age  profile  of 
the  Swedish 
population,  public  spending  on  health  is  projected 
to increase by 0.7 pps of GDP by 2070, compared 
to 0.6 pps for the EU overall (see Graph 16.2 and 
Annex 21). 

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2024-2070 

Graph A16.1: Life expectancy at birth, years 

Baseline scenario 
Source: European Commission / EPC (2024) 

In  2021,  spending  on  prevention  in  Sweden 
amounted  to  4.9%  of  total  spending  on 
healthcare,  compared  to  6.0%  for  the  EU 
overall.  Between  2019  and  2021,  spending  on 
prevention  in  Sweden  increased  by  around  55% 
(compared to a 106% increase for the EU overall). 
Proportionally, budget shares for prevention across 
the  EU  increased  most  for  emergency  response, 
disease  detection  and  immunisation  programmes. 
Between  2019  and  2021,  Sweden  saw  a 
in 
remarkable  proportional 
reported 
programmes, 
spending 
epidemiological  surveillance  and  risk  and  disease 
control  programmes.  On  another  issue  related  to 
public health, Sweden had one of the lowest rates 
of  antibiotic  consumption  in  the  EU  in  2021. 

immunisation 

increase 

on 

Source: Eurostat 

In  2021,  total  expenditure  on  healthcare 
dropped  back  slightly  to  11.2%  of  GDP,  but 
level 
remained  above  the  EU  average 
(10.9%). This is in line with the trend observed for 
other countries too, which is driven  – to a varying 

(135) Based on data provided directly by Member States to the 

European Centre for Disease Prevention and Control, under 
the European Surveillance System. 

62 

82.582.683.282.483.183.180.981.081.380.480.180.6201720182019202020212022SwedenEU6.67.00.60.702468EUSweden% of GDP20242070increase 
 
   
 
   
 
Table A16.1:Key health indicators 

Note: The EU average is weighted for all indicators except for doctors and nurses per 1 000 population, for which the EU simple 
average is used. Doctors’ density data refer to practising doctors in all countries except Greece, Portugal (licensed to practise) and 
Slovakia (professionally active). Nurses’ density data refer to practising nurses in all countries except Ireland, France, Portugal, 
Slovakia (professionally active) and Greece (hospital only). 
Source: Eurostat Database; except: * OECD, ** Joint Questionnaire on non-monetary healthcare statistics, *** ECDC, **** Council 
Recommendation on stepping up EU actions to combat antimicrobial resistance in a One Health approach. 

Consumption  has  gradually  decreased  over  the 
past  decade  and  that  trend  continued  during  the 
takes 
pandemic.  Moreover, 
a 
addressing 
comprehensive 
antimicrobial  resistance.  The  national  strategy  for 
2020-2023 has the overarching goal of preserving 
the  possibility  of  effective  treatment  of  bacterial 
infections in humans and animals (136). 

Sweden 
to 

approach 

increasing  density  of  doctors,  several  regions 
report shortages of general practitioners (GPs). The 
share of GPs in Sweden (14%) is much lower than 
the  EU  average.  The  density  of  nurses  has 
remained  stable  in  the  last  decade,  and  several 
regions  report  some  shortages  –  particularly  of 
specialist  (advanced  practice)  nurses  in  primary 
care. 

About  1  in  6  people  had  a  mental  health 
issue  in  2019,  which  was  close  to  the  EU 
average. The most common mental health issues 
in Sweden are anxiety and depression, with higher 
prevalence  among  women  and  people  on  lower 
incomes.  In  a  recent  Eurobarometer  survey (137) 
most  respondents  from  Sweden  reported  that 
either  they  or  a  family  member  had  encountered 
issues  accessing  mental  health  services  due  to 
long  waiting  lists  and  delays  before  diagnosis  or 
treatment. A significant proportion of respondents 
said that they did not know any good specialist. A 
new  mental  health  strategy  to  address  mental 
illness  and  promote  suicide  prevention  is  under 
development. 

Sweden  had  higher  numbers  of  doctors  and 
nurses  per  1 000 population  than  the  EU 
overall  in  2020.  The  number  of  doctors  has 
increased  since  2000,  driven 
in  part  by  an 
increasing  number  of  foreign-trained  doctors.  The 
number  of  Swedish  doctors  who  trained  abroad 
has quadrupled since 2006, due mainly to limited 
capacity  in  domestic  medical  schools.  Despite  the 

(136) Government Offices of Sweden (2023), Swedish Strategy to 

Combat Antibiotic Resistance 2020-2023. 

investments 

Limited 
in  healthcare  are 
planned  under  EU  programmes.  During  the 
2021-2027  programming  period  for  the  cohesion 
policy  funds,  Sweden is  planning  to invest  around 
EUR 3.8 million 
and 
applications (138).  Sweden  has  not  earmarked  any 
funding  for  investment  in  healthcare  under  its 
national recovery and resilience plan. 

e-health 

services 

in 

(138) The EU cohesion policy data reflect the status as of 13 May 

(137) https://europa.eu/eurobarometer/surveys/detail/3032 

2024. 

63 

20182019202020212022EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)65,660,262,159,7NA93.3 (2021)Cancer mortality per 100 000 population221,3216,7214,1206,6NA235.4 (2021)Current expenditure on health, % GDP 10,910,811,311,210,610.9 (2021)Public share of health expenditure, % of current health expenditure84,885,186,285,9NA81.1 (2021)Spending on prevention, % of current health expenditure 3,43,23,44,9NA6.0 (2021)Available hospital beds per 100 000 population213207205200NA525 (2021)Doctors per 1 000 population4,34,34,34.3*NA4.1 (2021)*Nurses per 1 000 population10,910,910,7NANA7.9 (2021)Total consumption of antibacterials for systemic use, daily defined dose per       1 000 inhabitants per day ***12,411,810,310,111,219.4 (2022) 
 
 
 
  
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

Annex 17 showcases the economic and social 
regional  dynamics  in  Sweden.  It  provides  an 
analysis  of  economic,  social  and 
territorial 
cohesion  in  the  Swedish  regions  and  assesses 
emerging  investment  needs  relevant  to  foster 
social  development  and 
economic  growth, 
competitiveness in the country. 

of 
Overview 
performance at regional level 

economic 

and 

social 

time.  As  highlighted  by  the  OECD (139),  lower 
productivity is often associated with poor transport 
links,  lower  employment  in  knowledge-intensive 
sectors, lower R&D expenditure and a lower share 
of tertiary education.  

Graph A17.2: Real labour productivity in Sweden, 
2000-2022 

economic  and 

Sweden's regions continue to perform well in 
indicators 
most 
compared to the EU average. However, regional 
disparities  have  risen  slightly  over  the  last  two 
decades,  as  has  the  gap  between  urban  centres 
and the rest of the country.  

social 

GDP  per  capita  (PPS)  at  country  level  was 
120%  of  the  EU  average  in  2022.  All  NUTS2 
regions were above or close to the EU average, but 
the  Stockholm  capital  region  was  by  far  the 
highest  at  160% (Table  A17.1).  In  contrast,  Norra 
Mellansverige had the lowest figure of 99% at just 
below the EU average. 

Graph A17.1: Average GDP per capita growth vs 
GDP per capita in 2011 

Source: DG REGIO calculations based on JRC (ARDECO) and 
Eurostat data 

GDP  per  capita  growth  between  2013  and 
2022  was  relatively  slow  in  Sweden.  Only 
Västsverige  grew  faster  than  the  EU  average,  all 
other  NUTS2  regions  grew  slower  than  the  EU 
average (Graph A17.1). 

Labour productivity in Sweden is higher than 
the  EU  average  in  all  NUTS2  regions  (Graph 
A17.2). However, the productivity gap between the 
capital  and  the  other  regions  has  increased  over 

64 

Source: ARDECO, DG REGIO elaboration 

The  three  northern  regions  were  much  less 
accessible  than  the  other  regions  in  2021. 
More  than  90%  of  the  population  living  within  a 
radius  of  120 km  could  be  reached  by  car  in  less 
than 90 minutes in the Stockholm region, but this 
ratio  drops  to  58%  in  Mellersta  Norrland,  56%  in 
Övre Norrland and 52% in Norra Mellansverige. 

The  population  is  growing  in  all  Swedish 
regions  mainly  due  to  migration  with  the 
capital  region's  population  growing  the 
fastest  and  the  three  northern  regions  the 
slowest.  Stockholm's  population  increased  on 
in  2013-2021  while  the 
average  by  1.41% 
population grew by only around 0.24% in Mellersta 
Norrland,  0.33%  in  Övre  Norrland  and  0.44%  in 
Norra Mellansverige.  

Sweden is an innovation leader, but there are 
notable  differences  in  regional  innovation 
performance.  Stockholm  is  one  of  the  most 
innovative  regions  in  the  EU  with  166.8%  of  the 
EU  average  in  2022  while  Norra  Mellansverige 
ranked  lowest  of  all  the  Swedish  regions  with 
102.1  (Map  A17.1).  A  similar  pattern  can  be  seen 
in  the  2022  Regional  Competitiveness 
Index, 
where  the  Swedish  regions  overall  score  highly. 

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

 
 
 
 
 
 
Table A17.1:Selected indicators at regional level in Sweden 

Source: Eurostat, EDGAR database 

Stockholm ranked highest and Norra Mellansverige 
ranked lowest of all the regions (Table A17.1).  

Investment  and  subnational  reform  needs 
ahead 

Map A17.1:  Sweden: Regional Competitiveness 
Index 2022 - Innovation sub-index 

Source: DG REGIO, JRC 

The employment rate was well above the EU 
average  in  all  Swedish  regions  in  2023 
(82.6% in Sweden vs. 75.3 in the EU). The rate 
was  highest  in  Stockholm,  85.2%,  and  lowest  in 
Östra  Mellansverige,  80%.  However,  in  2023, 
Sweden  had  a 
level  of 
unemployment, 7.7%, compared to the EU average 
of  6.1%.  The  unemployment  rate  was  lowest  in 
Övre  Norrland 
in 
Sydsverige. 

(5.7%)  but  reached  9.4% 

relatively  high 

for 

investments 

in  Sweden 
Cohesion  policy 
selected  areas  of  particular 
support 
the  green  and  digital 
relevance 
transition. The investment strategy agreed in the 
programmes adopted in 2022 remain valid for the 
current  economic  and  social  situation  in  Sweden. 
Taking into account recent developments, Sweden 
is invited to reflect on the following issues.  

Skilled  labour  shortages  are  an  obstacle  to 
regional development, especially in Sweden's 
most northerly region. It is estimated that more 
than  100 000  skilled  workers  will  be  needed  by 
2035  in  Sweden's  northern  sparsely  populated 
areas.  This  constitutes  a  major  skills  gap (140). 
Accessibility  and  quality  of 
links, 
especially railway, is also an issue in the northern 
parts  of  Sweden,  with  its  long  distances  and 
sparce  population.  There  are  also  clear  signs  of 
labour  shortages  across  the  country in  relation  to 
the  green  transition,  but  especially  in  non-urban 
areas (e.g. Nordregio (141).  

transport 

Innovation  will  be  key  to  addressing  the 
challenges  related  to  the  green  and  digital 
transitions.  This  is  especially  in  the  context  that 
economic  growth  has  been  slow  for  the  past 
decade  and  labour  productivity  and  innovation 

(140)  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. 

(141) Nordregio Strategies to address rural labour shortage | 

Nordregio 

65 

GDP per head (PPS)Productivity (GVA (PPS) per person employed)GDP per head growthPopulation growthNet migrationAt-risk-of-poverty or social exclusionEmployment rate, ages 20-64Unemployment rateR&D expenditureTransport performance by carEU Regional Competitiveness Index 2.0 - 2022 editionIndex, EU27 = 100 (2022)Index, EU27 = 100 (2022)Average % change on the preceding year (2013-2022)Average annual change per 1000 residents (2013-2021)Average annual change per 1000 residents (2013-2021)% of population (2022)% of population aged 20-64 (2023)% of labour force (2023)% of GDP (2021)Share of population in a 120-km radius that can be reached within 1h30 (%) (2022)Index, EU27 = 100European Union (27 MS)1001001.441.92.921.675.36.12.377.2100Sverige120113.81.37107.618.682.67.73.474.1120.3Stockholm160135.91.4314.18.415.385.26.93.690.5138.9Östra Mellansverige103103.51.1310.89.120.6809.13.670.6117.5Småland med öarna10398.11.28.27.418.983.96.91.655.2106.1Sydsverige101104.31.2710.98.622.880.59.43.280.9120.5Västsverige115108.51.66107.617.282.77.45.376.8119.9Norra Mellansverige99103.60.734.45.419.882.57.3151.9102.8Mellersta Norrland109109.21.012.441983.16.50.758.3106.1Övre Norrland1291251.253.33.616.582.65.72.556.4108.3NUTS region name 
 
 
 
 
 
 
 
  
 
contribute 

capacity  is  significantly  lower  outside  the  capital 
region.  Cohesion  policy  could  support  innovation 
to  more 
projects  which 
can 
sustainability.  Future 
the 
programmes  should  be  directed  towards  further 
greening  of  society  with the  ambition  of  reaching 
a  climate  neutral  economy  while  continuing  to 
address  regional  and  disparities  between  urban 
and non-urban areas. 

reallocation  under 

from 

under 

the 
Sweden  could  also  benefit 
opportunities 
Strategic 
the 
Technologies  for  Europe  Platform  (STEP) 
initiative, 
in  critical 
technologies  to  support  the  green  transformation 
of industry. 

investments 

to  boost 

66 

 
 
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

Swedish  banks  have  structurally  higher 
profitability  than  their  European  peers, 
strong  liquidity  positions  and  small  loan 
losses. Total banking-sector assets are equivalent 
to  just  over  300%  of  GDP,  of  which  the  five 
largest banks hold 75%. Sweden’s banks still rank 
among  the  most  profitable  in  the  EU  (with  an 
annualised  return  on  equity  of  13.2%  vs  9.9%  in 
the  EU  at  the  end  of  Q3-2023),  as  lending  rates 
rose more than the interest paid on deposits over 
the  past  year.  However,  this  increase  in  interest 
margin  started  from  a  comparatively  low  starting 
point.  This  is  because  volume  growth  rather  than 
margins  had  previously  been  the  main  driver  of 
banks’ profits. The capital adequacy ratio stood at 
22.1%  (vs  19.6%  in  the  EU),  well  above  existing 
capital  requirements,  although  this  was  partially 
driven by low risk weightings applied to mortgage 
loans  and  commercial  real  estate  exposures. 
However, the leverage ratio, measured as equity in 
relation  to  total  assets,  has  fallen  over  time  and 
remains one of the lowest in the EU at around 5%. 
The  liquidity  coverage  ratio  amounted  to  163.2% 
at  the  end  of  Q3-2023.  In  late  2023,  Swedish 
banks  also  posted  the  highest  loan-to-deposit 
ratio in the EU (154.1% vs 93.3% in the EU) linked 
to  a  high  dependence  on  market  funding, 
indicating  sensitivity 
in  funding 
conditions. At 0.9%, the non-performing-loan ratio 
is  one  of  the  lowest in the  EU  (the  EU  average is 
1.8%). 

to  changes 

financial 

intermediation 

Banks  dominate  the  financial  system,  yet 
their  relative  share  is  declining.  Non-bank 
financial 
is  growing,  providing 
to  both  non-financial  corporates  and 
credit 
individuals.  The  non-bank 
sector, 
investment 
insurance,  pension,  and 
including 
funds, manages assets that are almost as large as 
those  of  the  entire  Swedish  banking  sector.  This 
sector  has 
large  equity  portfolios,  but  also 
increasingly invests in corporate bonds with a high 
exposure  to  real  estate.  The  actions  of  the  non-
bank  financial  sector  can  amplify  shocks  and 
potentially  spread  risk  to  other  asset  classes  and 
agents.  In  Sweden,  banks  are  connected  to  the 
non-bank financial-intermediation sector via loans, 
securities,  and  derivatives  exposures,  as  well  as 
funding dependencies. Fintech activities within the 
non-bank  sector  also  continue  to  grow,  for 
example  in  insurance,  while  credit  provision  by 
non-bank fintech lenders is also increasing. 

The  changing  macroeconomic  environment, 
with  higher 
interest  rates  and  strong 
inflation, has led to stress building up in the 
real  estate  sector.  Swedish 
commercial 
property 
companies’  debt-to-operating-income 
ratios  are  high,  following  several  years  of 
increasing  debt  uptake.  Due  to  a  combination  of 
higher  interest  rates  and  a  slump  in  economic 
activity, funding and other costs have risen rapidly 
and weakened  commercial real  estate companies’ 
interest-rate-coverage  ratios.  Given  high  leverage 
and short loan maturities, this has put pressure on 
commercial  real  estate  companies.  Nevertheless, 
strong  fundamentals  mitigate  some  of 
the 
pressure.  Swedish  property  companies  have 
resilient  occupancy  rates,  and  inflation-indexed 
contracts  have  kept  rental  levels  up  and  helped 
limit  the  impact  of  increased  yield  requirements. 
Moreover,  since  many  larger  property  companies 
have  loans  with  fixed  interest  rates  via  credit 
agreements or interest-rate derivatives, the entire 
rise in interest rates has not yet affected them. As 
a  result,  commercial  real  estate  valuations  have 
only  gradually  fallen,  declining  by  an  average  of 
around 5-10% since the peak in 2022, depending 
on the property segment.  

Commercial  real  estate  has  a  significant 
footprint in bank balance sheets, resulting in 
real 
concentrated  credit  risk.  Commercial 
estate  firms  are  financed  mainly  through  bank 
loans  (60%), but increasingly  also through  capital 
markets  (from  10%  in  2012  to  35%  in  2022), 
mainly the bond market. Their funding costs have 
strongly  increased  as  demonstrated  by  rising 
yields  and  interest  rates  on  new  bank  loans.  The 
prospect  of  interest  rates  remaining  higher  for 
longer,  combined  with  a  relatively  short  average 
maturity of around 3-4 years, means that interest-
rate costs for these firms are likely to rise as debt 
is 
rolled  over.  Moreover,  some  borrowers, 
particularly  sub-investment-grade  issuers,  may 
face  strained  refinancing  conditions  or  much 
higher  risk  premiums  on  the  bond  market.  Higher 
borrowing  costs  and  volatile  conditions  in  capital 
markets  could  lead  borrowers  to  secure  alternate 
financing, through existing and new credit facilities 
and  secured  loans,  which  Swedish  banks  can 
satisfy to a large extent. 

67 

 
 
 
 
 
Table A18.1:Financial Stability Indicators 

1Last data: Q3 2023. 
2Data are annualised. 
3Data available for EA countries only, EU average refers to EA area. 
Source: ECB, Eurostat. 

mortgagors,  thereby  making  them  particularly 
exposed  to  higher  inflation,  higher  interest  rates 
and  falling  housing  prices.  This  will  negatively 
affect consumer spending by this group. 

To  reduce  excessive  borrowing,  the  Swedish 
supervisory  authority  has  reinstated  the 
macro-prudential  measures  that  were  eased 
at  the  beginning  of  the  pandemic.  With  the 
potential  impact  on  the  wider  financial  system  in 
mind,  the  Swedish  Financial  Services  Authority 
even  strengthened  requirements  in  some  areas, 
such  as  by  introducing  new  risk-weight  floors  for 
mortgage  and  corporate  exposures.  Floors  were 
set at 25% if secured by residential properties and 
at  35%  if  secured  by  commercial  property  from 
30 September 2023. 
Services 
The 
Authority  also  raised  the  countercyclical  capital 
buffer  to  2%  from  end-June  2023,  and  is  in  the 
process  of  changing  the  application  of  capital 
requirements  for  Swedish  banks  to  adapt  to  the 
EU’s  banking  package  which  implements  the  last 
parts of the Basel III agreement in the EU. 

Financial 

While  banks  are  well  placed  to  absorb 
potential  losses,  they  face  emerging  risks 
related  to  real-estate  firms’  debt-servicing 
capacity.  Overall, 
capital  base  and 
the 
profitability  of  Swedish  banks  are  strong,  and 
most  have  already  set  aside  quite  sizeable  loan-
loss reserves that can cushion any sizeable credit 
losses.  Swedish  banks  have  robust  and  prudent 
underwriting  standards,  based  on  stressed  cash 
flow  rather  than  on  loan-to-value  ratios.  As  a 
result,  commercial  real  estate  loans  appear  well 
collateralised  overall,  which  should  provide  a 
cushion  against  any  rise  in  non-performing  loans. 
So far, the banks hold modest proportions of high-
loan-to-value  loans,  and  they  report  low  non-
performing-loan  ratios  for  their  corporate  real-
estate  exposure.  However,  early 
signs  of 
deterioration are visible in so-called Stage 2 loans, 
i.e.  loans that  are  showing  signs  of  weakness  but 
not  yet  non-performing.  These  increased  over  the 
course of 2022 and remain elevated.  

The  share  of  mortgage  loans  with  interest 
rates  that  are  fixed  or  floating  for  a  short 
period  has  increased,  leaving  households 
more exposed to changes in interest rates. A 
high  level  of  indebtedness  of  households  has  led 
to  a  rapid  rise  in  the  debt-service  burden  of 
homeowners, given the prevalence of floating-rate 
mortgages. This interest-rate sensitivity has led to 
a considerable fall in disposable income for many 
borrowers – particularly those with a high loan-to-
income ratio. New mortgagors are overrepresented 
in  this  group  and  tend  to  have  larger  nominal 
than  existing 
loans  and 

smaller  margins 

68 

2017201820192020202120222023EUMedianTotal assets of the banking sector (% of GDP)289.6272.8279.1311.8280.1291.6290.3257.0184.6Share (total assets) of the five largest banks (%)58.254.354.854.155.058.3--69.6Share (total assets) of domestic credit institutions (%)192.777.779.178.780.380.080.8-62.9NFC credit growth (year-on-year % change)5.76.13.64.07.012.01.8-2.4HH credit growth (year-on-year % change)7.05.55.15.66.83.40.5-1.4Financial soundness indicators:1        - non-performing loans (% of total loans)1.31.01.11.01.00.80.91.81.8- capital adequacy ratio (%)25.920.721.622.322.222.022.119.620.1- return on equity (%)210.912.210.98.410.09.813.29.913.2Cost-to-income ratio (%)154.251.956.557.154.554.347.352.844.9Loan-to-deposit ratio (%)1172.7190.7187.9163.2152.6162.3154.193.380.2Central bank liquidity as % of liabilities0.00.00.01.20.10.00.0-0.7Private sector debt (% of GDP)201.1197.0199.7212.7213.5207.5-133.0118.4Long-term interest rate spread versus Bund (basis points)33.325.529.347.464.239.17.2107.7104.2Market funding ratio (%)62.662.663.763.463.462.0-50.839.8Green bonds outstanding to all bonds (%)3-------4.02.71-34-1011-1718-2424-27Colours indicate performance ranking among 27 EU Member States. 
 
 
  
 
ANNEX 19: TAXATION 

tax 

that  Sweden’s 

Sweden’s tax revenues are relatively high in 
relation to GDP, with the highest contribution 
coming  from  labour  taxation.  Table  A19.2 
shows 
revenues  as  a 
percentage of GDP were above the EU average in 
2022.  However,  in  relative  terms,  the  difference 
between  the  Swedish  figure  and  the  EU  average 
decreased  from  2.2%  in  2021  to  1.6%  in  2022. 
The  share  of  labour  tax  in  total  tax  revenue  is 
significantly higher than the EU average, while the 
share  of  capital  taxes  is  clearly  below  (see 
Graph A19.2).  

Sweden  has  a  relatively  stringent  carbon 
taxation  framework,  even  if  revenues  from 
environmental  taxes were  slightly  below the 
EU aggregate as a share of GDP and of total 
tax  revenue. In  Sweden,  environmental 
tax 
revenues are low in part due to low emissions. For 
example, electricity is generated mostly from low-
is  priced 
carbon  sources.  However,  carbon 
stringently when one compares tax rates. Sweden 
has  the  fourth  highest  effective  average  carbon 
rate (EACR) (adjusted for free allocation under the 
EU  Emissions  Trading  System  (ETS))  out  of  71 
countries  that  report  to  the  OECD (142).  The  so-
called reduction obligation, by which suppliers are 
obliged  to  blend  in  an  increasing  proportion  of 
biofuels  into  petrol  and  diesel,  has  been  reversed 
as of 2024. As of 2024, Sweden has reduced the 
energy  taxes  on  fuels  (EUR 0.5 billion).  Pollution 
and  resources  taxes  only  account  for  3.2%  of 
environmental  taxes,  so  there  is  potential  to 
strengthen  the  application  of  the  ‘polluter  pays’ 
principle. While Sweden has a pesticide tax, it has 
abolished a tax on waste incineration in 2023, and 
a  tax  on  plastic  bags  will  expire  in  November 
2024.  There  may  also  be  scope  as  regards  e.g. 
waste  loadings  to  water  and  fertilisers.  Sweden 
had  previously  implemented  a  tax  on  fertilisers, 
but this was subsequently removed. 

The relatively low capital tax rate in Sweden 
is  due  to  low  taxation  of  capital  gains  / 
dividend  income  and  of  immovable  property. 
Sweden  has  one  of  the  largest  differences  in  the 
OECD  between  the  top  statutory  tax  rate  on 
employment  income  and  dividend  income  (at  8% 

(142) 78.58 Rate Unit: Real 2021 EUR/tCO2e (source: OECD Series 

on Carbon Pricing and Energy Taxation) 

to 

recurrent 

In  addition, 

compared  with  the  OECD  average  of  0.6.%  (143). 
Taxpayers  therefore  have  an  incentive  to  use 
income-shifting 
re-classify 
methods 
employment  income  as  capital  income.  Revenues 
from  property  taxes  in  Sweden  were  just  1%  of 
GDP,  which  was  significantly  below  the  EU 
aggregate. 
taxes  on 
immovable  property,  which  are  considered  to  be 
among  the  taxes  least  detrimental  to  economic 
growth,  are  below  the  EU  average.  Reducing  the 
tax  deductibility  of  mortgage  interest  payments 
and/or  increasing  recurrent  property  taxes  for 
homeowners  would  help  reduce  risks  related  to 
high  household  debt  and  housing  market 
imbalances.  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. 
The average forward-looking effective tax rates on 
corporate  income  exceeded  the  EU  average  by 
0.5 pps  in  2022,  making  Sweden’s  corporate 
taxation system slightly less competitive than the 
rest of the EU. 

Sweden’s Recovery and Resilience Plan (RRP) 
includes  several  tax  reforms.  In  the  field  of 
environmental  taxation,  legislation  will  partially 
end  the  reduction  of  energy  taxation  in  industry 
and  agriculture  and  will  adjust  taxable  benefit 
rates  for  company  cars.  In  the  field  of  capital 
gains taxation, the RRP includes the raising of the 
maximum  amount  of  capital  gains 
taxation 
resulting  from  the  sale  of  a  dwelling  that  can  be 
deferred (this  was implemented  on  11 July 2020) 
and  the  ending  of  interest  payments  on  such 
deferred  capital  gains  (this  was  implemented  on 
1 January 2021). 

low-income  and 

The  tax-benefit  system  helps  reduce  income 
inequality, but Sweden’s 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, 
second  earners. 
such  as 
Graph A19.1  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 with the EU average. The picture is 
to  some  extent  mitigated  by  the  tax  wedge  for 
second earners with an income of 67% of average 
wage,  whose  spouses  earns  the  average  wage. 

(143) OECD Economic Surveys: Sweden 2023 

69 

 
 
 
 
 
 
 
Table A19.1:Taxation indicators 

(1) Forward-looking effective rate (OECD) 
(2) A higher value indicates a stronger redistributive impact of taxation 
(*) EU-27 simple average 
(**)  Forecast value for 2022, if available. For more details on the VAT gap, see European Commission, Directorate-General for 
Taxation and Customs Union, 2023, VAT gap in the EU, https://data.europa.eu/doi/10.2778/911698. 
For more data on tax revenues as well as the methodology applied, see the Data on Taxation webpage, 
https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en. 
Source: European Commission and OECD 

This is the EU average and is also identical to the 
tax  wedge  for  single  earners  at  this  wage  level, 
which  indicates  that  work  incentives  for  second 
earners  moving  into  employment  are  equal  to 
those  for  single  persons  at  67%  of  the  average 
wage.  The  Swedish 
tax-benefit  system  has 
reduced  the  Gini  coefficient    by  9.1 pps  in  2022, 
which  was  above  the  EU  average  of  7.9 pps  (see 
In  the  2024  budget,  Sweden 
Table  A19.1). 
announced  that  it  will  be  lowering  taxes  for  low- 
and  middle-income  earners  (EUR 0.9 billion)  and 
pensioners 
the 
unemployed  back  into  employment,  Sweden  has 
implemented  a  system  of  subsidised  2-year 
employment contracts (‘etableringsjobb'). 

(EUR 0.1 billion). 

help 

To 

Graph A19.1: Tax wedge for single and second 
earners as a % of total labour costs, 2023 

The second earner tax wedge assumes a first earner at 100% 
of the average wage and no children. For the methodology of 
the tax wedge for second earners, see OECD, 2016, Taxing 
Wages 2014-2015. 
Source: European Commission 

tax 

and 

Sweden  performs  relatively  well  on  tax 
compliance 
administration. 
Outstanding  tax  arrears  were  0.9%  of  total  tax 
revenue in  2021 (0.4%  in  2020)  and  significantly 
below  the  EU  average  of  35.5%.  The  EU  average  
could    nevertheless  be  inflated  due  to  a  small 
number  of  Member  States  with  very  high  values. 
Features  of 
that 
contribute  to  low  arrears  are  a  strong  focus  on 
cooperative  compliance;  a  high  proportion  of 
source-based  taxation;  and 
tax 
accounts, which each individual  and company has 

the  Swedish 

the  use  of 

tax  system 

70 

37.839.742.149.339.7202530354045505550100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - SESingle earner - EU averageSecond earner -  SESecond earner -  EU averageSE2010202020212022202320102020202120222023Total taxes (including compulsory actual social contributions) (% of GDP)42.942.442.641.840.837.940.040.440.2Labour taxes (as % of GDP)24.224.624.023.220.021.320.720.3Consumption taxes (as % of GDP)12.612.011.811.910.810.711.211.0Capital taxes (as % of GDP)6.15.86.86.67.18.08.68.9Of which, on income of corporations (as % of GDP)3.13.03.53.62.42.53.03.4Total property taxes (as % of GDP)1.01.01.01.11.92.32.22.1Recurrent taxes on immovable property (as % of GDP)0.70.70.70.61.11.21.11.0Environmental taxes as % of GDP2.72.01.91.92.42.22.32.0Tax wedge at 50% of average wage (Single person) (*)39.038.937.937.537.833.931.732.131.831.7Tax wedge at 100% of average wage (Single person) (*)42.842.742.542.442.141.040.139.940.040.2Corporate income tax - effective average tax rates (1) (*)20.419.719.519.519.019.0Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)10.39.69.99.18.68.18.27.9Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)0.40.940.935.5VAT Gap (% of VAT total tax liability, VTTL)(**)4.33.63.83.39.75.4Tax structureProgressivity & fairnessTax administration & complianceSwedenEU-27 
 
      
 
   
 
Graph A19.2: Tax revenues from different tax types, % of total revenue 

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

with  the  Swedish  Tax  Agency,  to  make payments. 
Furthermore,  the  VAT  gap  (the  gap  between 
revenues actually collected and the theoretical tax 
liability)  was  forecast  to  be  3.3%  in  2022  after 
being  3.8%  in  2021  (so  below  the  EU-average  of 
5.4% in 2021). 

71 

50.627.322.155.628.515.8Tax revenue shares in 2022, Sweden (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital3.53.90.90.90.10.21.52.51.12.70123456Sweden -environmentaltaxationEU -environmentaltaxationSweden -propertytaxationEU - 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) NIIP excluding direct investment and portfolio equity shares. 
Source: Eurostat and ECB as of 2024-5-17, where available; European Commission for forecast figures (Spring forecast 2024). 

72 

2004-072008-122013-2020212022202320242025Real GDP (y-o-y)3.80.71.96.12.7-0.20.22.1Potential growth (y-o-y).1.72.22.11.91.71.41.5Private consumption (y-o-y)3.31.71.66.32.3-2.50.52.5Public consumption (y-o-y)0.51.40.93.3-0.11.51.70.5Gross fixed capital formation (y-o-y)6.9-0.53.67.16.2-1.5-1.42.1Exports of goods and services (y-o-y)7.70.83.011.16.53.31.82.9Imports of goods and services (y-o-y) 7.51.23.011.69.6-0.91.62.5Contribution to GDP growth:Domestic demand (y-o-y)3.21.01.85.42.6-1.10.31.8Inventories (y-o-y)0.1-0.10.00.41.1-1.3-0.30.0Net exports (y-o-y)0.5-0.10.10.3-1.02.20.10.3Contribution to potential GDP growth:Total Labour (hours) (y-o-y).0.70.70.50.50.60.40.5Capital accumulation (y-o-y).0.60.80.80.90.80.70.7Total factor productivity (y-o-y).0.40.70.80.50.30.30.4Output gap1.6-1.6-0.5-0.20.6-1.3-2.5-1.9Unemployment rate6.97.97.48.97.57.78.48.2GDP deflator (y-o-y)1.41.72.12.66.05.62.61.3Harmonised index of consumer prices (HICP, y-o-y)1.31.91.22.78.15.92.01.8HICP excluding energy and unprocessed food (y-o-y)0.81.61.21.65.57.42.61.5Nominal compensation per employee (y-o-y)4.03.02.74.62.84.14.13.0Labour productivity (real, hours worked, y-o-y)2.40.11.13.50.4-1.40.11.4Unit labour costs (ULC, whole economy, y-o-y)1.12.81.9-0.32.85.83.61.3Real unit labour costs (y-o-y)-0.31.0-0.2-2.8-3.00.20.90.0Real effective exchange rate (ULC, y-o-y)-0.61.9-2.42.9-5.6-8.5-1.4-1.9Real effective exchange rate (HICP, y-o-y)-0.40.3-2.23.1-6.3-4.9..Net savings rate of households (net saving as percentage of net disposable income)4.710.414.015.513.014.4..Private credit flow, consolidated (% of GDP)12.77.810.516.210.4...Private sector debt, consolidated (% of GDP)153.3190.5198.8213.5208.0...of which household debt, consolidated (% of GDP)61.375.186.891.987.5...of which non-financial corporate debt, consolidated (% of GDP)92.1115.4112.0121.7120.5...Gross non-performing debt (% of total debt instruments and total loans and advances) (1)..1.00.80.7...Corporations, net lending (+) or net borrowing (-) (% of GDP)4.42.1-1.71.40.51.92.12.1Corporations, gross operating surplus (% of GDP)25.424.524.626.727.227.126.126.2Households, net lending (+) or net borrowing (-) (% of GDP)0.53.95.55.74.05.45.95.5Deflated house price index (y-o-y)10.11.54.68.1-3.0-10.9..Residential investment (% of GDP)3.93.75.05.35.34.0..Current account balance (% of GDP), balance of payments7.16.13.77.15.46.86.76.8Trade balance (% of GDP), balance of payments6.75.23.64.82.74.6..Terms of trade of goods and services (y-o-y)-0.4-0.10.00.4-2.6-1.0-0.3-0.3Capital account balance (% of GDP)-0.2-0.20.00.00.10.0..Net international investment position (% of GDP)-11.8-8.92.619.031.033.2..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2)-21.4-22.1-13.3-2.7-9.7-10.2..IIP liabilities excluding non-defaultable instruments (% of GDP) (2)122.5153.3163.8146.0167.7157.8..Export performance vs. advanced countries (% change over 5 years)..-6.15.10.74.4..Export market share, goods and services (y-o-y)-0.7-4.30.0-1.0-6.02.2-1.7-0.8Net FDI flows (% of GDP)2.32.50.91.42.63.0..General government balance (% of GDP)1.8-0.1-0.10.01.2-0.6-1.4-0.9Structural budget balance (% of GDP)..0.20.10.90.10.00.2General government gross debt (% of GDP)44.938.241.136.733.231.232.031.3forecast 
 
 
 
  
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

This  annex  assesses  fiscal  sustainability 
risks for Sweden over the short, medium and 
long  term. 
It  follows  the  multi-dimensional 
approach  of  the  European  Commission’s  2023 
Debt Sustainability Monitor, updated based on the 
Commission 2024 spring forecast. 

(Table A21.2) (144). 

1  –  Short-term  risks  to  fiscal  sustainability 
low.  The  Commission’s  early-detection 
are 
indicator (S0) does not signal any short-term fiscal 
risks 
gross 
financing needs are expected to be low, at around 
6%  of  GDP  on  average  over  2024-2025 
markets’ 
(Table A21.1, Table 1). 
perceptions  of  sovereign  risk  are 
investment 
grade, as confirmed by the main rating agencies.  

Government 

Financial 

2  –  Medium-term  fiscal  sustainability  risks 
are low.   

Under the DSA baseline, general government 
debt is projected to decline over the medium 
term,  reaching  22%  of  GDP  in  2034  (Graph 1 
and Table 1) (145). The decrease in the government 
debt  ratio 
is  underpinned  by  the  assumed 
structural  primary  surplus  (excluding  changes  in 
cost  of  ageing)  of  0.7%  of  GDP  as  of  2024.  This 
level  appears  plausible  compared  with  past  fiscal 
the 
performance 

(Table A21.2) (146).  Moreover, 

(144) The S0 is a composite indicator of short-term risk of fiscal 
stress. It is based on a wide range of fiscal and financial-
competitiveness indicators that have proven to be a good 
predictor of emerging fiscal stress in the past.  

(145) The assumptions underlying the Commission’s ‘no-fiscal 

policy change’ baseline include in particular: (i) a structural 
primary surplus, before changes in ageing costs, of 0.7% of 
GDP from 2024 onwards; (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 ahead); (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; (iv) real GDP growth rates 
from the Commission 2024 spring forecast, followed by the 
EPC/OGWG ‘T+10 methodology projections between T+3 and 
T+10 (average of 1.8%); (v) ageing costs in line with the 
2024 Ageing Report (European Commission, Institutional 
Paper 279, April 2024). For information on the methodology, 
see the 2023 Debt Sustainability Monitor (European 
Commission, Institutional Paper 271, March 2024). 

(146) This assessment is based on the fiscal consolidation space 

indicator, which measures the frequency with which a tighter 
fiscal position than assumed in a given scenario has been 
observed in the past. Technically, this consists in looking at 
the percentile rank of the projected SPB within the 
distribution of SPBs observed in the past in the country, 
taking into account all available data from 1980 to 2023. 

baseline projection benefits from a still favourable 
snowball effect up to 2034, although lower than in 
recent  years.  Government  gross  financing  needs 
are  expected  to  decrease  over  the  projection 
period, reaching around 4% of GDP in 2034. 

is  stress-tested 
The  baseline  projection 
against 
deterministic 
alternative 
four 
scenarios to assess the impact of changes in 
key  assumptions  (Graph 1).  All  four  scenarios 
confirm  a  declining  debt  path,  at  levels  close  to 
the  baseline.  Increasing  the  forecast  deterioration 
of  the  structural  primary  balance  in  2024  by  one 
half,  as  in  the  ‘lower  SPB’  scenario,  would  only 
increase  debt  by  less  than  1 pp.  of  GDP by  2034. 
Assuming  a  temporary  worsening  of  financial 
conditions  (an  increase  of  interest  rates  by  1  pp. 
on  newly  issued  debt),  as  in  the  ‘financial  stress’ 
scenario, would not have a visible impact on debt 
by  2034  compared  to  the  baseline.  Reverting  to 
balance 
the 
(corresponding  to  the  15-year  average  surplus  of 
1.1%  of  GDP),  as  in  the  ‘historical  SPB’  scenario, 
would  reduce  debt  by  around  2  pps.  of  GDP  by 
2034  compared  with  the  baseline.  In  contrast,  a 
permanent  worsening  of 
the  macro-financial 
conditions,  as  under  the  ‘adverse  interest-growth 
rate differential’ scenario (in which the differential 
is  1  pp.  higher  than  the  baseline),  would  increase 
the  debt  ratio  by  around  2  pps.  of  GDP  by  2034 
compared with the baseline.   

structural 

historical 

primary 

the  next 

five  years  and 

The  stochastic  projections  indicate  low  risk 
due to the low probability of debt increasing 
over 
low 
uncertainty (147).  These  stochastic  simulations 
indicate  that  the  debt  ratio  could  be  higher  in 
2028 than in 2023 with a probability of only 18%, 
entailing  low  risk  given  the  initial  low  debt  level. 
Moreover, there is only limited uncertainty around 
the  baseline  debt  projection,  as  measured  by  the 
difference  of  around  10 pps.  of  GDP  between  the 
10th  and  90th  debt  distribution  percentiles  in  five 
years’ time (Graph 2).  

3  –  Long-term  fiscal  sustainability  risks  are 
low. This assessment is based on the combination 
of two fiscal gap indicators, capturing the required 

(147) The stochastic projections show the joint impact on debt of 

10,000 different shocks affecting the government’s 
budgetary position, economic growth, interest rates and 
exchange rates. This covers 80% of all the simulated debt 
paths and therefore excludes tail events. 

73 

 
 
 
 
 
 
 
 
 
(with  a  diversified  and  large  investor  base),  a 
relatively  low  share  of  public  debt  held  by  non-
residents  and  historically  low  borrowing  costs 
reflecting  a  long-standing  strong  creditor  status. 
Sweden’s  positive  net  international  investment 
position also helps mitigating vulnerabilities.  

fiscal effort to stabilise debt (S2 indicator) and to 
bring it to 60% of GDP (S1 indicator) over the long 
term (148).  This  assessment 
is  driven  by  the 
favourable initial budgetary position, allowing for a 
limited increase in ageing-related expenditure. 

The  S2  indicator  points  to  low  risk.  It  signals 
that  Sweden  would  only  need  to  improve  its 
structural  primary  balance  by  0.7 pp.  of  GDP  to 
ensure  that  debt  stabilises  over  the  long  term 
(Table A21.1,  Table 2).  This  result  is  underpinned 
by 
initial  budgetary  position 
(contributing 0.1 pp. of GDP), leaving some leeway 
for  the  limited  projected  increase  in  ageing  costs 
(contributing  0.7 pp.  of  GDP)  that  mainly  results 
from  an  increase  in  long-term  care  and  health 
care costs. 

the  favourable 

The  S1  indicator  also  points  to  low  risk.  The 
negative  value  of  this  indicator  (-1.1 pps.  of  GDP) 
shows  that  the  country  has  a  safety  margin  to 
maintain its debt below the 60% of GDP reference 
value by 2070. This result is mainly driven by the 
favourable  initial  budgetary  position  (contribution 
of  -0.5  pp.  of  GDP)  and  the  low  starting  level  of 
the  debt  ratio  (contribution  of  -0.7 pp.  of  GDP), 
which  more  than  compensate  for  the  projected 
increase  in  ageing  costs  by  2070  (contribution  of 
0.2 pp. of GDP) (Table 2).  

4  –  Finally,  several  additional  risk  factors 
need to be considered in the assessment. On 
the one hand, risk-increasing factors are related to 
the  sensitivity  to  the  interest  rate  given  the 
relatively high share of short-term public debt and 
contingent  liability  risks  stemming  from  elevated 
private  debt.  On  the  other  hand,  risk-mitigating 
factors  include  the  stability  of  debt  maturity  in 
recent  years,  relatively  stable  financing  sources 

(148)The S2 fiscal sustainability indicator measures the 

permanent SPB adjustment in 2025 that would be required 
to stabilise public debt over an infinite horizon. It is 
complemented by the S1 indicator, which measures the 
permanent SPB adjustment in 2025 needed to bring the debt 
ratio to 60% by 2070. The impact of the drivers of S1 and 
S2 may differ due to the infinite horizon component 
considered in the S2 indicator. For both the S1 and S2 
indicators, the risk assessment depends on the amount of 
fiscal consolidation needed: ‘high risk’ if the required effort 
exceeds 6 % of GDP, ‘medium risk’ if it is between 2% and 
6% of GDP, and ‘low risk’ if the effort is negative or below 
2% of GDP. The overall long-term risk classification 
combines the risk categories derived from S1 and S2. S1 
may notch up the risk category derived from S2 if it signals a 
higher risk than S2. See the 2023 Debt Sustainability Monitor 
for further details. 

74 

 
 
Table A21.1:Debt sustainability analysis - Sweden 

Source: Commission services 

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

Source: Commission services 

75 

Table 1. Baseline debt projections20212022202320242025202620272028202920302031203220332034Gross debt ratio (% of GDP)36.733.231.232.031.330.629.528.227.126.025.023.923.022.0Changes in the ratio-3.5-3.5-1.90.7-0.6-0.7-1.2-1.2-1.1-1.1-1.1-1.0-1.0-1.0of whichPrimary deficit-0.2-1.7-0.10.70.2-0.2-0.6-0.8-0.7-0.7-0.6-0.6-0.5-0.5Snowball effect-3.1-2.5-1.0-0.1-0.5-0.5-0.6-0.5-0.4-0.4-0.4-0.4-0.4-0.4Stock-flow adjustments-0.20.6-0.90.1-0.40.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)8.55.95.36.75.85.85.35.04.84.64.44.24.13.9S1S2Overall index  (pps. of GDP)-1.10.7of which Initial budgetary position-0.50.1Debt requirement-0.7Ageing costs0.20.7of which    Pensions-0.5-0.5     Health care0.40.6     Long-term care0.71.1Education-0.4-0.6Table 2. Breakdown of the S1 and S2 sustainability gap indicators051015202530354020212022202320242025202620272028202920302031203220332034Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p9001020304020212022202320242025202620272028% of GDPGraph 2. Stochastic debt projections 2024-2028MedianBaselineBaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallLOWLOWLOWLOWLOWLOWDebt level (2034), % GDP22.019.722.623.822.0Debt peak year20242024202420242024Fiscal consolidation space87%73%88%87%87%Probability of debt ratio exceeding in 2028 its 2023 level18%Difference between 90th and 10th percentiles (pps. GDP)10.2Short termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)(1) Debt level in 2034. Green: below 60% of GDP. Yellow: between 60% and 90%. Red: above 90%. (2) The debt peak year indicates whether debt is projected to increase overall over the nextdecade.Green:debtpeaksearly.Yellow:peaktowardsthemiddleoftheprojectionperiod.Red:latepeak.(3)Fiscalconsolidationspacemeasurestheshareofpastfiscalpositionsinthecountrythatweremorestringentthantheoneassumedinthebaseline.Green:highvalue,i.e.theassumedfiscalpositionisplausiblebyhistoricalstandardsandleavesroomforcorrectivemeasuresifneeded.Yellow:intermediate.Red:low.(4)Probabilityofdebtratioexceedingin2028its2023level.Green:lowprobability.Yellow:intermediate.Red:high(alsoreflectingtheinitialdebtlevel).(5)thedifferencebetweenthe90thand10thpercentilesmeasuresuncertainty,basedonthedebtdistributionunder10000differentshocks.Green,yellowandredcellsindicateincreasinguncertainty.(ForfurtherdetailsontheCommission'smultidimensionalapproach,seethe2023DebtSustainability Monitor)LOWLOWLOWLOWLOW