COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - Sweden Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Sweden
Date: 2025-06-04
Institutions: European Commission, Reform and Investment Task Force
Subjects: Sweden, budget policy, economic policy, economic recovery, economic reform, employment policy, housing policy, renewable energy, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 4.6.2025  SWD(2025) 227 final  COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - Sweden Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Sweden {COM(2025) 227 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC DEVELOPMENTS AND KEY POLICY 
CHALLENGES 

Recent economic developments 

Sweden’s  economy  rebounded  in  2024 
after  a  decline  in  2023.  Real  GDP  (GDP 
adjusted  for  inflation)  increased  by  1%  and 
economic  growth  is  expected  to  continue  at  a 
moderate  pace  in  2025,  supported  by  lower 
interest  rates  and  fading  price  pressures. 
However,  the  recovery  is  expected  to  be 
delayed  by  global  trade  disruptions.  Economic 
growth  is  set  to  gradually  pick  up  in  2026, 
primarily  supported  by  stronger  private 
consumption  growth  as  households  are 
expected to reduce savings in view of receding 
uncertainty, 
improved 
conditions  in  the  labour  market.  According  to 
the  Commission’s  Spring  2025  Economic 
Forecast,  real  GDP  growth  is  projected  to  be 
1.1%  in  2025  and  1.9%  in  2026.  Headline 
harmonised  index  of  consumer  prices  (HICP) 
inflation fell to  2% in 2024, down from 5.9% 
in  2023.  Consumer  price  inflation  is  set  to 
remain  above  2%  on  average  in  2025  before 
moderating in 2026.  

disinflation 

and 

in 

EU, 

the 

but 

rates 

structural 

The  jobs  market  has  been  weak  yet 
resilient, 
challenges 
remain.  Sweden  has  one  of  the  highest 
yet 
employment 
unemployment remains persistently high. Amid 
sluggish economic activity, the unemployment 
rate rose in 2024 to 8.4% from 7.7% in 2023 
(see  Social  Scoreboard  in  Annex  13).  The 
labour  market  is  expected  to  remain  weak  in 
2025,  with  the  unemployment  rate  rising  to 
8.7%  before  falling  back  somewhat  in  2026, 
following  the  expected  recovery  with  a  lag.  
Social  partners  agreed  nominal  wage  rises  of 
around 3½% in both 2025 and 2026.  

Swedish 

highly 
The 
competitive  and  innovative  thanks  to 
good  infrastructure,  business  efficiency 

economy 

is 

to  diverse  and 

and  high  levels  of  R&D.  Companies  have 
good  access 
innovative 
financing  sources,  not  only  through  bank 
funding,  but  also  equity  and  bond  market 
funding. Sweden’s capital markets play a vital 
role  in raising venture and growth capital  and 
funding  to  businesses.  Small  and  medium-
sized  enterprises  benefit  from  low  regulatory 
barriers,  affordable  access  to  finance,  and 
good  digital  and  transport 
infrastructure. 
Sweden 
is  home  to  a  thriving  high-tech 
innovation  ecosystem,  underpinned  by  high 
business R&D expenditure. 

Geopolitical risks are causing uncertainty. 
The Swedish economy is highly integrated into 
international  value  chains  and  is  therefore 
vulnerable  to  trade  disruptions  and  financial 
market  volatility.  Heightened  uncertainty 
among consumers and firms risks weighing on 
consumer  spending  and  investment,  in  turn 
holding 
gradual 
improvement in the jobs market. 

expected 

back 

the 

Despite  a  fiscal  deficit,  Sweden  has 
ample fiscal space. The general government 
balance  is  projected  to  remain  negative  in 
2025  at  1.5%.  Public  finances  nonetheless 
provide  fiscal  space  for  considerable  public 
investment needs, in particular on military and 
civil defence. Tax revenues are resilient overall 
despite  reductions  in  marginal  income  taxes 
and 
taxes.  The  general 
government  gross  debt  will  remain  at  a  low 
level  at  just  below  34%,  even  in  a  context  of 
potential  borrowing-financed  investments  in 
defence.  

some  energy 

Net  expenditure over  the  course  of 2024 
and  2025  is  growing  but  keeping  below 
the maximum recommended by Council. In 
2024,  net  expenditure  (1)  in  Sweden  grew  by 

(1)  Net expenditure is defined in Article 2(2) of Regulation 
(EU) 2024/1263 as government expenditure net of (i) 

2 

 
 
 
 
Box 1: 

UN Sustainable Development Goals (SDGs) 

Sweden  performs  well  on  SDGs  related  to  productivity  (SDGs  4,  8,  9),  but  is  moving 
away on achieving no poverty (SDG 1). 

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

6.1% (see Annex 1). This increase was mainly 
driven  by  public  investment  in  defence  and 
infrastructure  and  a  capital  injection  to  the 
central  bank.  Net  expenditure  has  been 
adjusted  for  discretionary  revenue  measures, 
such  as  tax  adjustments,  that  had  an  annual 
impact  on  revenue.  In  2025,  government  net 
expenditure  is  forecast  by  the  Commission  to 
grow  by  1.7%,  which  is  below  the  maximum 
growth  rate  recommended  by  the  Council  (2). 
The cumulative growth rate of net expenditure 
in 2024 and 2025 taken together is projected 
is  below  the  maximum 
at  7.9%,  which 
cumulative 
10.7% 
rate 
recommended by the Council.   

growth 

of 

by 

increased 

accompanied 
household 
indebtedness,  which  is  among  the  highest  in 
Europe.  Over  recent  years,  concerns  about 
household  debt  and  the  financial  stability  of 
commercial  real  estate  firms  have  grown  as 
interest rates rose. This in turn contributed to a 
significant decline in housing construction and 
to  higher  debt  service  levels,  which  held  back 
consumer spending and led to ripple effects in 
the  broader  economy.  High  household  debt 
combined  with  overvalued  house  prices 
increase  vulnerability  to  a  market  correction. 
Policy progress to tackle these issues has been 
limited. 

High  house  prices  and  a  dysfunctional 
housing  market  affect  labour  mobility 
and  productivity.  Sweden  continues  to  be 
affected  by  staff  shortages  and  skills 
mismatches,  including  in  the  north  of  the 
country,  a  key  location  for  green  technology. 
Labour  productivity  levels  are  comparatively 
high  in  Sweden,  but  productivity  growth  has 
slowed  since  2008.  Among  the  possible  root 
causes  of  this  slowdown  has  been  limited 
labour  mobility  hindered  by  a  shortage  of 
affordable  housing (4).  The  rental  market  is 
regulated  by  a  ‘utility  value  system’,  which 
means  that  the  collectively  negotiated  rents 
diverge from notional market levels. While this 
keeps  rent  levels  more  affordable  in  sought-
after  locations,  it  also  leads  to  limited  supply 
and long waiting times. In addition, regulatory 
incentives  favour  house 
barriers  and  tax 
buyers, which has driven up property prices at 
a time of already high prices. This has led to a 
from 
misallocation  of 

resources  away 

Macroeconomic challenges 

Sweden’s  macroeconomic  vulnerabilities 
of  high  private  debt  and  highly  valued 
real  estate  are  closely  connected.  The 
Commission  undertook  an  in-depth  review  of 
the  Swedish  economy  as  part  of 
the 
Macroeconomic Imbalance Procedure earlier in 
2025 (3).  This  review  found  that  Sweden 
continues to face vulnerabilities related to the 
real  estate  market  and  high  levels  of  private 
debt.  Rising  house  prices  have  been 

interest expenditure, (ii) discretionary revenue 
measures, (iii) expenditure on programmes of the Union 
fully matched by revenue from Union funds, (iv) 
national expenditure on co-financing of programmes 
funded by the Union, (v) cyclical elements of 
unemployment benefit expenditure, and (vi) one-off 
and other temporary measures. 

(2)  Council Recommendation of 21 January 2025 

endorsing the national medium-term fiscal-structural 
plan of Sweden (OJ C, C/2025/644, 10.2.2025, ELI: 
http://data.europa.eu/eli/C/2025/644/oj). 

(3)  European Commission (2025), In-depth Review 2025 

(4)  OECD (2023), Economic Policy Reforms 2023 Going for 

Sweden, May 2025. 

Growth, October 2023. 

3 

 
 
 
 
 
productive 
competitiveness (5). 

investment, 

which 

affects 

with 

risks, 

significant 

in  place 

Appropriate  macroprudential  measures 
to  dampen 
are  currently 
household credit growth. In February 2024, 
the  European  Systemic  Risk  Board  concluded 
that  Sweden’s  residential  real  estate  market 
the 
faces 
macroprudential policy stance considered only 
partially  sufficient  to  address  the  situation 
effectively (6).  A  government 
committee 
tasked with reviewing the impact of borrower-
based  macroprudential  measures  in  Sweden 
made  recommendations  to  ease  the  existing 
rules 
in  November  2024.  However,  any 
relaxation  of  macroprudential  policy  before 
implementing  structural  reforms  addressing 
current  market  dysfunctions  could  result  in 
higher  house  prices  and  an 
in 
household  debt,  accentuating  the  underlying 
sources of vulnerability. 

increase 

its 

improving 

competitiveness. 
further 
Furthermore,  there  are  still  challenges  with 
integrating certain groups into the jobs market, 
in particular people with disadvantaged socio-
economic  and  migrant  backgrounds.  The 
uptake  of  incentive  schemes  such  as  the 
recently  launched  ‘Introduction  Jobs’  scheme 
(etableringsjobb) has been very low so far. 

to  qualify 

is  key  to 
Bridging  educational  gaps 
improving 
Sweden’s 
competitiveness. 
education system has high dropout rates with 
an  exceptionally  large  proportion  of  pupils 
failing 
for  upper  secondary 
education,  in  particular  since  the  introduction 
of  stricter  qualification  conditions  in  2011. 
This  significantly  diminishes  the  employment 
opportunities for those young people. Similarly, 
qualification  gaps  limit  progress  to  post-
secondary  education.  Targeted  reforms  in  the 
raise 
education  system  are  needed 
achievement  levels  and  skills  and  reduce 
dropout rates. 

to 

The  educational  disparity  between  pupils 
is  closely  tied  to  their  socio-economic 
backgrounds.  There  is  a  clear  lack  of  basic 
and  digital  skills  among  certain  cohorts  of 
students,  which  is  mainly  due  to  their  limited 
inclusion  in  education.  Fully  integrating  non-
Swedish-born 
the 
populations, 
development of the skills needed  and thereby 
increasing  the  number  of  qualified  people  is 
key for Sweden’s long-term competitiveness. 

ensuring 

High  electricity  costs  undermine  the 
competitiveness  of  Swedish  businesses. 
Regional  disparities  in  electricity  prices  hinder 
competitiveness  (see  Section  4  and  Annex  8). 
Power  and  grid  capacity  constraints  in  the 
south  of  Sweden  lead  to  increased  costs  for 
local  households  and  businesses. 
The 
transmission  capacity  between  the  north  and 
south  is  insufficient.  This  highlights  the  case 
for  investment  in  extending  grid  capacity  and 
incentivising  the  uptake  of  flexibility  services 
and demand response.  

Key policy challenges 

Addressing  labour  market  challenges,  in 
particular skills shortages, would support 
from 
competitiveness.  Sweden 
labour  shortages  in  certain  sectors,  which 
prevents  it  from  fully  exploiting  its  human 
capital,  increasing  innovation  and  ultimately 

suffers 

(5)  European Commission (2025), In-depth Review 2025 

Sweden, May 2025. 

(6)  European Systemic Risk Board (2024), Follow-up report 
on vulnerabilities in the residential real estate sectors 
of the EEA countries, February 2024. 

4 

 
 
Box 2: 

Barriers to private and public investment 

Public  investment  in  Sweden  has  been  increasing  and  is  the  highest  in  the  EU,  while 
private  investment  is  above  the  EU  average.  There  are  opportunities  for  further 
improvement,  and  addressing  the  following  barriers  could  improve  the  effectiveness  and 
efficiency of investment decisions. Some of the main  barriers to  private and public investment 
include: 

•Labour and skills shortages. Around 78% of Swedish companies cite the shortfall in labour 
or skills as a significant obstacle to investment. 

•Imbalances  in  the  housing  market.  To  encourage  the  allocation  of  more  savings  towards 
productive investment, reform of the housing market along with related taxation and financing 
could unblock additional funds. 

•Permitting  issues  for  large-scale  green  energy  projects.  Prolonged  and  uncertain 
permitting  processes  hamper  economic  growth  and  deter  investment,  particularly  for  onshore 
and offshore wind energy projects. 

•Inefficient subsidies. Phasing out fiscal subsidies that support debt bias could free additional 
funds for investment. 

The  implementation  of  Sweden’s  RRP  is  delayed.  At  present,  Sweden’s  first  payment  request 
covering 53% of the milestones and targets in its RRP is under assessment. Efforts are needed 
to ensure completion of all RRP measures by 31 August 2026. 

 It remains important to accelerate the implementation of cohesion policy programmes. The mid-
term review offers opportunities to speed up progress and better address EU strategic priorities 
related to competitiveness, defence, housing, water resilience and the energy transition. 

labour  differs 
The  availability  of 
significantly  across  regions.  Shortages  of 
labour exist in both the public sector (teachers, 
nurses)  and  private  sector,  particularly  in  the 
north  of  Sweden.  To  help  reduce  inequalities 
and strengthen competitiveness, it is crucial to 
labour  market  policies, 
implement  active 
and 
facilitate 
strengthen work incentives across the country. 

targeted 

training 

skills 

green 

commitments. 

Sweden  has  adjusted  the  level  of  its 
The 
ambitious 
transport  sector  is  responsible  for  a  large 
share of greenhouse gas emissions in Sweden 
and will be key in enabling Sweden to meet its 
climate  targets.  The  sector,  in  particular  road 
transport,  accounts  for  three  quarters  of 
energy demand for oil and petroleum products. 
A significant reduction in the ambition of fuel 
blending  obligations,  which  aim  to  reduce 
greenhouse  gas  emissions  from  diesel  and 
petrol  by  blending  in  biofuel,  coupled  with 

5 

lower  fuel  taxes,  have  increased  greenhouse 
gas  emissions.  Sweden’s  carbon  removals 
have declined in recent years and fall short of 
what  would  be  needed  to  meet  the  2030 
target  for  land  use,  land  use  change  and 
forestry.  At  the  same  time,  the  state  of 
ecosystems, and in particular protected forest 
habitats,  continues  to  degrade.  Sweden  is  set 
to  miss  its  2030  emission  targets  with  its 
current policies. 

a 

faster 

regulatory 
Capacity  constraints  and 
barriers 
green 
prevent 
transition.  Sweden  has  a  large  untapped 
potential  of  renewable  energy  (onshore  and 
offshore  wind).  However,  lengthy  procedures 
and  permitting  barriers,  particularly  from 
municipalities  and  defence  authorities  –  they 
can revoke permits even after permission has 
been granted – creates investment uncertainty 
and hinders the full deployment of renewable 
energy. 

 
 
 
INNOVATION, BUSINESS ENVIRONMENT AND 
PRODUCTIVITY 

Competitiveness is boosted by 
high levels of innovation 

has  been  an  issue (7),  but  the  new  Research 
and Innovation Bill (2025-2028) provides for a 
more  coherent  system  from  the  research 
stage  through  to  commercialisation.  This  is 
expected  to  boost  both  R&D  expenditure  and 
scientific excellence (see Annex 3). 

expenditure 

innovation,  R&D  and 
R&D 

Sweden is leading the EU-27 in the areas 
intangible 
of 
a 
as 
investments. 
percentage  of  GDP  is  above  the  EU  average, 
as are R&D staffing levels in businesses and in 
higher education. Since 2019 Sweden’s patent 
applications per million inhabitants have been 
two  to  three  times  higher  than  the  EU-27 
average,  highlighting  its  strong  ability  to  put 
innovation to practical use. 

High  business  R&D  expenditure  means  a 
thriving  high-tech  innovation  ecosystem. 
Sweden’s  business  R&D  intensity  (2.65%  of 
GDP  in  2023)  is  the  highest  in  the  EU  and 
close  to  that  of  leading  global  competitors 
such as the US (2.83% of GDP in 2022). Public 
research  expenditure  supports  private-sector 
research efforts, for example through Vinnova, 
Sweden’s  innovation  agency.  The  government 
is  considering  new  initiatives  to  stimulate 
research  and  development.  The 
business 
proposed  Budget  Bill  for  2025  intends  to 
continue  improving  the  tax  conditions  that 
support  companies’  opportunities  to  conduct 
research  and  development,  including  through 
exploring a new research and development tax 
incentive. 

Despite  a  robust  science  base,  Sweden´s 
scientific excellence has declined slightly 
over time. High investment in R&D is not fully 
reflected  in  scientific  outcomes  and  results, 
and  a  shortage  of  highly-skilled  staff  in 
science, technology and engineering could hold 
back 
investment.  Weak  strategic 
alignment across the Swedish research system 

future 

staff 

skilled 

Highly-skilled staff in science, technology 
and engineering is in limited supply. When 
Sweden’s  most  R&D-intensive  companies 
decide  where  to  make  R&D  investments,  the 
availability  of 
is  a  key 
consideration.  Despite  recent  improvements, 
45%  of  companies  find  it  difficult  to  recruit 
R&D  staff.  The  number  of  new  doctoral 
graduates  in  science,  technology,  engineering 
and  mathematics  (STEM)  has  almost  halved 
since  2017 
(see  Annex  3).  To  boost 
competitiveness  and  innovation,  it  is  vital  to 
encourage  more  young  people  to  enrol  in 
STEM  courses  and  offer  better  career 
prospects to highly-qualified job-seekers from 
abroad.  Having  recognised  this,  Sweden  has 
presented  a  strategy  to  encourage  more 
people to study STEM subjects (8). 

Private  investment  is  heavily  focused  on 
machinery and equipment, with moderate 
emphasis  on  digitalisation.  In  line  with 
broader  EU  trends,  around  half  of  Sweden’s 
total 
to  machinery  and 
equipment.  Swedish  businesses  invest  slightly 
more  than  their  EU  counterparts  in  digital 
technologies  such  as  software,  data, 
IT 
networks  and  R&D,  but  relatively  less  in  staff 
training. 

investments  go 

(7)  OECD (2023), Public research funding in Sweden 

https://www.oecd.org/en/publications/public-research-
funding-in-sweden_9eb9a85b-en.html. 

(8)  See A STEM strategy for Sweden – from preschool to 

postgraduate study 
https://www.government.se/press-
releases/2025/02/a-stem-strategy-for-sweden--
from-preschool-to-postgraduate-study/ (in Swedish). 

6 

 
 
 
Efficient businesses make for a 
competitive and innovative 
economy 

from 

firms 

benefit 

Swedish 
low 
regulatory  barriers,  affordable  access  to 
finance  and  good  digital  and  transport 
infrastructure,  but  challenges  remain. 
Sweden is a front-runner in terms of business 
dynamism,  with  a  percentage  of  high-growth 
companies  twice  the  EU  average  (at  18%  of 
total active enterprises in 2022). Nevertheless, 
according to the 2024 EIB Investment Survey, 
Swedish  firms  struggle  with  issues  such  as 
skilled  staff  shortages,  uncertainty  about  the 
future and high energy costs. In addition, SMEs 
lag behind on adopting and using digital tools 
and in terms of innovation expenditure. 

The 

competitiveness. 

Two new policy initiatives aim to ease the 
regulatory  burden  on  businesses  and 
Swedish 
boost 
government has set up a Simplification Council 
tasked  with  drawing  up  proposals  on  how  to 
ease the regulatory burden on businesses and 
reduce  the  associated  costs.  Also,  a  newly 
established  Implementation  Council  will  assist 
the government in  its  effort to  make  Swedish 
businesses  more  competitive  by  avoiding 
implementation  above  the  minimum  level, 
cutting  red  tape  and  reducing  administrative 
and  other 
implementing  EU 
regulations. 

costs  of 

Businesses  have  good  access  to  capital 
markets.  Sweden’s  capital  markets  are 
among  the most  liquid  and  mature  in the  EU, 
offering  professional  and  retail  investors  a 
wide array of investment options. Sweden has 
thus positioned itself as a major financing hub 
in Europe, providing entrepreneurs with capital 
to  develop  and  expand  their  businesses. 
Swedish  households  held  financial  assets 
amounting  to  around  320%  of  GDP  in  2023, 
well  above  the  EU  average  of  some  210%. 
This is due not only to a mature capital market 
and a developed banking and pension system, 
but  also  to  fiscal  incentives  that  have  helped 
culture 
create 
characterised  by  high  financial  literacy  and  a 
well-developed private equity market. Sweden 

investment 

distinct 

a 

is  also  a  leading  FinTech  hub  that  attracts 
significant  venture  capital  investments  and 
numerous innovative startups. 

Productivity growth has slowed 

Labour  productivity  is  above  the  EU 
average  but  growth  rates  are  becoming 
more  volatile.  Swedish  labour  productivity, 
in 
measured  as  GDP  per  hour  worked 
purchasing  power  standard  (PPS)  terms,  is 
projected  to  reach  108%  of  the  EU-27 
average in 2024, down from a peak of 114% 
in  2021.  While  Sweden  outpaced  the  EU  in 
productivity  growth  during  the  early  2000s, 
the  financial  crisis  brought  greater  volatility, 
with sharp spikes in labour productivity growth 
alternating with significant drops. Despite this 
volatility,  Swedish  productivity  is  expected  to 
grow  by  more  than  the  EU  average  in  2025 
and  2026,  after  a  period  of  balance  sheet 
in 
the 
adjustments 
comparison to peers (Graph 1). 

economy 

slowing 

Graph 2.1: Labour productivity 

(1) Productivity: GDP per hour worked in PPS (index, EU-
27=100); growth rates: annual growth in real GDP per hour 
worked. 
(2) Commission Spring 2025 Forecast 
Source: European Commission 2025 

Sweden’s  slowing  productivity  is  mainly 
due  to  slower  total  factor  productivity 
growth.  From  2000  to  2024,  total  factor 
than 
productivity  growth 
2 percentage 
Capital 
deepening  appears  to  follow  cyclical  patterns 

fell  by  more 
(Graph 2). 

points 

7 

105107109111113115117119121123125-3-2-101234Index, EU=100% changeLabour productivity growth (y-o-y), SELabour productivity growth (y-o-y), EU-27Labour productivity growth (y-o-y), EA-20Labour productivity, SE (in PPS, EU=100, rhs)forecast (2) 
  
(2000-2008,  2009-2016,  2017-2021),  likely 
linked to business cycles. As in other advanced 
economies,  total  factor  productivity  played  a 
major  role  in  the  declining  labour  productivity 
growth  of  the  past  decades.  Against  this 
backdrop,  Sweden 
set  up  a 
Productivity Commission tasked with analysing 
the  factors  affecting  productivity  growth  in 
various  sectors,  which  is  due  to  report  its 
findings in October 2025. 

recently 

Sweden  has  a  mixed  record  on  skills. 
tertiary  education  have  been 
Levels  of 
consistently  above  the  EU-27  average  since 
2018.  As  regards  basic  education,  measured 
by  proficiency  in  reading,  mathematics  and 
science,  quality  has  declined  according  to  the 
most  recent  PISA  survey,  but  Sweden  is  still 
above  the  EU-27  average.  Underachievement 
in  basic  skills  persists  especially  among 
students  of  a  migrant  and/or  disadvantaged 
socioeconomic background (see Chapter 4). 

Graph 2.2: Total factor productivity 

(1) Actual TFP growth (Ameco ZVGDF) is based on a Cobb-
Douglas production function with labour volume in actual 
hours worked and the net capital stock with constant factor 
income shares. Trend TFP (Ameco CVGDPF) is the TFP 
contribution to potential growth according to the EU 
Commonly Agreed Methodology. 
(2) Commission Spring 2025 Forecast 
Source: European Commission 2025 

8 

-4-3-2-101234% changeTrend TFP growth, SETrend TFP growth, EU-27Trend TFP growth, EA-20Actual TFP growth, SEforecast (2) 
  
 
 
 
 
 
 
 
 
DECARBONISATION, ENERGY AFFORDABILITY AND 
SUSTAINABILITY 

stalled.  This  was  due  partly  to  significant 
reductions  in  taxes  on  liquid  fuels  (leading  to 
some of the lowest diesel and petrol prices in 
the EU), and partly to the phasing out,  by the 
end  of  2022,  of  a  cash  incentive  paid  by  the 
State to encourage people to buy low-emission 
and  electric  cars.  The  limited  rise  in  the 
reduction  obligation  level,  the  only  measure 
adopted  so  far  in  2025,  will  only  marginally 
reduce the shortfall in meeting the ESR target. 

for 

the 

incentives 

Recent  changes  to  environmental  taxes 
green 
reduce 
transition.  In  addition  to  reducing  taxes  and 
excises  on  fuel,  Sweden  will  abolish  the 
aviation  tax  at  Swedish  airports  from  1 July 
2025.  With  pollution  and  resource  taxes 
accounting  for  only  3.2%  of  environmental 
taxes, Sweden could strengthen the use of the 
‘polluter pays‘ principle (see Annex 2). 

Sweden’s  carbon  removals  fall  short  of 
meeting  the  2030  target  for  land  use, 
land  use  change  and  forestry.  Carbon 
removals have declined in recent years, almost 
halving since the early 2010s (9). At the same 
time,  the  status  of  ecosystems  protected 
in 
under  EU  nature  protection  directives, 
particular  protected  forest  habitats,  continues 
to deteriorate (see Annex 9). 

Improving the energy system is 
key to the green transition 

Limited power and grid capacity result in 
regional  disparities  in  electricity  supply 

(9)  Climate Policy Council (Klimatpolitiska Rådet), Annual 
report 2025, report No 8, ISBN: 978-91-540-6235-5, 
ref. no: 2024-00041/K. 

Sweden is at risk of missing its 
climate targets, also due to policy 
backtracking 

Sweden  is  not on  track  to  meet its  2030 
emission  reduction  target  under  the 
Effort  Sharing  Regulation  (ESR).  In  2024 
the  country’s  greenhouse  gas  emissions 
increased  as  a  result  of  policy  backtracking 
chiefly  in  the  area  of  transport.  Current 
policies  are  projected  to  reduce  greenhouse 
gas  emissions  from  effort  sharing  sectors  by 
43.8%  by  2030,  falling  short  of  the  50% 
reduction  target  (see  Annex 7).  This  not  only 
jeopardises  Sweden’s  climate  goals  but  also 
weakens the country’s competitive advantage. 
its  abundant 
By  failing 
renewable-energy  potential,  Sweden 
risks 
progressing  more  slowly  on  decarbonisation 
and missing out on the opportunity to boost its 
competitiveness  by  reducing  energy  costs. 
Swift adoption of additional climate mitigation 
measures  is  essential  for  Sweden  to  meet  its 
obligations  under  the  ESR  and  strengthen  its 
competitiveness in the long term. 

to  fully  exploit 

Emissions from transport increased after 
a  policy  reversal.  A  key  part  of  Sweden’s 
progress  towards  meeting  its  climate  targets 
under the ESR came from the transport sector, 
responsible  for  three  quarters  of  energy 
demand  for  oil  and  petroleum  products. 
Sweden partially reversed its green policies by 
significantly  reducing  requirements  to  blend 
fuel  with  biofuel  to  reduce  emissions  from 
diesel  and  petrol  (known  as  the  ‘reduction 
obligation’). As of January 2024, the minimum 
blending  requirement  was  lowered  to  6% 
(from  7.8%  on  petrol  and  30.5%  on  diesel), 
before  rising  slightly  to  10%  from  1 July 
2025.  Furthermore,  in  2024  electric  vehicle 
sales  as  a  percentage  of  total  car  sales 

9 

 
 
 
 
telecommunications 

development of technologies in strategic areas 
of  economic  activity  such  as  renewable 
energy, 
digital 
services,  aerospace  and  defence.  To  ensure 
access  to  deposits,  priority  must  be  given  to 
speeding  up  permitting  for  extraction  and 
ensuring  finance  for  capital-intensive  projects 
(see Annex 7). 

and 

and  demand,  ultimately  holding  back 
competitiveness.  Despite  an  abundant 
supply  of  electricity  in  the  north  of  Sweden, 
limited  transmission  capacity  to  the  south 
prevents  tackling  supply  shortages  there.  This 
harms  competitiveness,  particularly  in  the 
south,  where  prices  are  higher  on  average, 
with prices in 2024 1.5-2 times higher than in 
the north (10). These shortcomings highlight the 
need  to  provide  incentives  for 
increasing 
generation  capacity  to  final  demand  levels, 
improve grid capacity and promote greater use 
for  electricity 
of 
consumption.  Significant 
generation  and 
improve  and 
investments  are  needed  to 
modernise 
cross-border 
Further 
integration could help balance supply-demand 
mismatches,  including  intermittent  peaks  in 
renewable-energy  generation.  This  would 
further  boost  the  resilience  of  Sweden’s 
electricity market, while also strengthening the 
functioning  of  the  EU  electricity  market  (see 
Annex 8). 

flexibility  mechanisms 

grids. 

of 

the 

create 

authorities, 

Unpredictable permitting procedures hold 
back 
grid 
development 
infrastructure  and  renewable  energy 
sources.  Drawn-out  procedures  and  long-
standing permitting barriers, mainly due to the 
extensive  veto  rights  of  municipalities  and 
defence 
investment 
uncertainty  and  stand  in  the  way  of  fully 
exploiting  renewables  potential. Adjusting  the 
regulatory  framework  to  address  permitting 
bottlenecks  could  improve  planning  certainty. 
Possible  measures  include  revising  spatial 
planning,  and  swiftly  implementing  relevant 
EU 
legislation  to  simplify  and  speed  up 
permitting, while keeping a technology-neutral 
approach.  The  REPowerEU  chapter  of  the 
Swedish  recovery  and  resilience  plan  includes 
a reform aimed at speeding up the permitting 
process for upgrades to the electricity grid. 

Sweden  plays  a  major  role  in  the  EU’s 
supply  of  critical  raw  materials.  Several 
the 
raw  materials  are  vital 
critical 

to 

(10)  Swedish Energy Agency (Energimyndigheten), Nuläget 
på elmarknaden, February 2025, published 6 March 
2025, Table 2.  
.https://trk.idrelay.com/res/mail/2930/56481/413fee67-
78e1-423e-9c21-2e932ef1e3f5.pdf (in Swedish). 

10 

 
 
SKILLS, QUALITY JOBS AND SOCIAL FAIRNESS 

Educational  attainment  plays  a  major  role  in 
this as people with low levels of education (12) 
are at higher risk of poverty or social exclusion 
than those with a higher level of education (13) 
(30% 
Similarly, 
unemployed  people  are  at  greater  risk  than 
people  in  employment  (63.6%  compared  to 
8.9%). 

to  11.5%). 

compared 

Completion of upper secondary education 
is  essential  for  getting  a  job.  Among 
people  from  the  above  groups  registered  as 
unemployed, almost half lack upper secondary 
education. Most were born outside Europe and 
many lack the basic prerequisites for finding a 
job  or  studying,  including  language  skills. 
Improving pathways to formal adult vocational 
education  could  be  a  way  to  help  this  group 
enter the labour market. 

There  is  room  for  improving  training 
paths  and  coordination  of  support to  the 
unemployed.  Unemployed  people  looking  to 
acquire  new  skills  can  receive  support  from 
various actors. This includes Swedish language 
courses and vocational education and training 
courses offered via the municipalities and job 
seeking  support  from  the  Public  Employment 
is  currently  not 
there 
Service.  However, 
sufficient 
these 
between 
coordination 
activities. A new draft bill (14) due to enter into 
force  on  1 March  2026  aims  to  improve  the 
exchange  of  information  about  job-seekers  in 
need  of 
the  Public 
training  between 
and  municipalities 
Employment 
providing  adult  education  services.  Better 

Service 

(12)  ISCED levels 0-2. 

(13)  ISCED levels 5-8. 

(14)  The draft bill (in Swedish) requires municipalities to give 

the Public Employment Service the necessary 
information about job-seekers in relation to municipal 
adult education for labour-market policy purposes. It 
authorises the Public Employment Service to process 
personal data in the context of adult education services 
provided by municipalities. 

Improving education and skills is 
key to reducing unemployment 

Sweden’s  employment  rate  is  above  the 
EU  average,  but  so  is  the  unemployment 
rate, which remains a concern. Sweden has 
had  persistent  high  unemployment  for  many 
years.  In  2024,  due  to  a  weak  economy,  it 
increased  across  all  groups:  native-born  and 
foreign-born,  young  people  and  older  people, 
women  and  men.  In  the  Commission’s  Spring 
2025  Economic  Forecast  unemployment  is 
projected  to  remain  high  in  2025  (8.7%)  and 
to start improving only in 2026 (8.4%), 

Finding  work  is  particularly  difficult  for 
people  from  vulnerable  groups.  The 
Swedish  Public  Employment  Service  has 
identified  certain  groups  with  an  above-
average  risk  of  remaining  unemployed  for 
longer  periods,  including  people  who  have  no 
upper  secondary  education,  are  born  outside 
Europe,  are  above  55  years  of  age  or  have  a 
disability 
reduced  work 
capacity (11).  The  gap  between  those  born 
outside  the  EU  and  native-born  Swedes 
remains  is  particularly  high.  In  2024,  Sweden 
had the highest unemployment rate in the EU 
for people born outside the EU (19.3% versus 
the  EU  average  of  10.8%),  while  for  the 
native-born the unemployment rate was 5.7% 
(see Annex 10). 

resulting 

in 

Social  conditions  are  to  a  large  extent 
impacted  by  employment  status  and 
educational attainment levels. Poverty and 
social  exclusion  disproportionately  affect 
people from vulnerable groups (see Annex 11). 

(11)  Swedish Public Employment Service 

(Arbetsförmedlingen), Autumn 2024 Labour Market 
Forecast. 

11 

 
 
 
 
coordination  could  help  the  unemployed  enter 
the  labour  market,  in  particular  people  from 
vulnerable  groups  such  as  those  born  outside 
the  EU.  Furthermore,  single  contact  points 
could  be  set  up  to  guide  job-seekers  and 
oversee the process. A higher employment rate 
among  vulnerable  groups  would  help  Sweden 
reach  not  only  its  2030  employment  target 
but also its 2030 poverty reduction target. 

early 

education, 

There  are  discrepancies  between  regions 
in  terms  of  labour  demand  and  supply. 
Unemployment  is  much  higher  in  the  south 
than  in  the  north  of  Sweden  (9.4%  compared 
to 5.7%) (15). There is high demand in the north 
not  only  for  skilled  engineers  and  green 
transition  specialists,  but  also  for  workers  in 
healthcare, 
childhood 
education and care and other support services. 
Although,  there  are  currently  few  positive 
incentives  for  people  to  relocate  to  regions 
with  better 
job  opportunities,  the  Public 
Employment  Service  has  been  tasked  with 
increasing  occupational  and  geographical 
mobility  among  unemployed  persons.  This 
includes  monitoring  more 
the 
requirements to extend their job search and if 
necessary,  change  profession  or  move  to  a 
location  where  there  are  job  vacancies.  In 
addition,  as  from  1  January  2025,  the 
Government  has 
level  of 
reimbursement  for  unemployed  persons’  trips 
and  accommodation  in  connection  to  job 
interviews or labour market training. To reduce 
differences  in  employment  between  regions, 
Sweden  could  consider  providing  financial 
incentives for people to move to regions where 
more  jobs  are  available.  This  could  include 
supporting lower-income jobseekers financially 
so  they  can  afford  a  relocation  and  helping 
them  search  for  housing  or  a  place  in  kinder 
garden or school for their children. 

increased 

closely 

the 

Teacher  shortages  are  aggravating  the 
declining education outcomes. In the 2022 
PISA results, Swedish students perform better 
on  average 
their  European  peers, 
however,  the  general  drop  in  their  basic  skills 
since  2018  is  among  the  sharpest  in  the  EU. 

than 

(15)  NUTS2 regions Southern Sweden (Sydsverige) and 

Upper Norrland (Övre Norrland). 

also 

differs 

substantially 
Performance 
between  the  stronger  and  the  weaker  pupils. 
To  improve  basic  skills,  Sweden  has  stepped 
back  from  digitalisation  and  is  increasing  the 
availability  of  analogue  learning  materials  in 
teaching and books in libraries, which must be 
staffed.  However,  the  quality  of  education  is 
also  affected  by  a  shortage  of  qualified 
teachers,  in  particular  in  schools  with  many 
pupils  of  a  migrant  and/or  disadvantaged 
background. There is therefore a need to make 
the  teaching  profession  more  attractive  by 
improving teachers’ status, salaries and career 
prospects (see Annex 12). 

Educational reforms should help 
improve educational outcomes 

performance 

Students’ background strongly influences 
their 
education 
and 
prospects. 
In  2022,  15%  of  all  pupils 
finishing  lower  secondary  school  had  grades 
that  were  too  low  or  incomplete,  excluding 
them  from  qualifying  for  upper  secondary 
school.  Underachievement  in  basic  skills  is 
especially  high  for  students  of  a  migrant  or 
disadvantaged socioeconomic background. For 
the 
latter  group  underachievement  has 
increased  significantly  since  2018,  e.g.  by 
11.7 percentage  points  in  mathematics  (see 
Annex 12).  The  performance  gap  between 
native-born  and  foreign-born  students  is  one 
of  the  largest  in  the  EU.  Students  of  a 
disadvantaged 
socioeconomic  background, 
which  often  overlaps  with  a  migrant 
background, are more likely to be concentrated 
in  schools  in  specific  areas  where  there  often 
is  a  shortage  of  qualified  teachers.  More 
systemic  measures  aimed  at  addressing 
shortages of qualified teachers and improving 
basic skills, combined with a better distribution 
and 
a 
disadvantaged 
background, 
assisted  by  reinforced  tutoring,  could  help 
improve results and prospects. 

students  with 

or  migrant 

integration 

of 

Flexible  and  more  accessible  learning 
pathways  to  continued  education  could 
improve  outcomes.  For  many  pupils,  the 
current  grading  system  effectively  constitutes 
a  barrier  to  moving  on  to  upper  secondary, 

12 

 
 
those 

higher  or  vocational  education.  Low  or 
insufficient  grades,  especially  in  key  subjects, 
in compulsory and upper secondary school too 
often  represent  an  effective  blockage  for 
including  vocational 
continued  education, 
training and adult education. This leads to low 
attainment  and  a  high  share  of  those  leaving 
schools  with  insufficient  grades,  limits  future 
career  prospects  of  the  pupils  affected,  and 
disproportionally 
from 
affects 
disadvantaged  backgrounds.  It  also  limits  the 
supply  of  suitably  skilled  labour  to  support 
employment  and  productivity  growth,  holding 
back  the  growth  potential  of  the  Swedish 
economy. 
learning 
pathways,  grading,  selection  and  admission 
requirements  should  be  reformed,  including 
for  access  to  upper  secondary  and  higher 
education. 
both 
educational  opportunities  and  the  supply  of 
suitably  skilled  labour,  boosting  employment 
and  productivity,  necessary  to  enhance  the 
growth potential of the Swedish economy. 

This  would 

improve 

flexible 

ensure 

To 

13 

 
KEY FINDINGS 

To  boost  competitiveness,  sustainability  and 
social fairness, Sweden would benefit from: 

mechanisms 
consumption; 

in  energy  generation  and 

•  reversing 

trend 

in 
the  declining 
education  outcomes  by  reducing  the 
number  of  pupils  unable  to  progress  to 
upper  secondary  and  continued  education,   
better 
a 
disadvantaged  or  migrant  background  and 
the  shortage  of  qualified 
addressing 
teachers; 

integrating 

those 

with 

•  taking 

to 

steps 

further 

help 
disadvantaged groups enter the labour 
enhancing 
market, 
coordination 
public 
between 
employment service and the municipalities. 

including 

the 

by 

• 

implementing  the  RRP, 
including  the 
REPowerEU  chapter;  swiftly  implementing 
cohesion  policy,  taking  advantage  of  the 
opportunities  under  the  mid-term  review 
and making optimal use of EU instruments, 
including  InvestEU  and  STEP,  to  improve 
competitiveness; 

•  reducing  risks  from  high  household 
debt  and  maintaining  macroprudential 
measures,  including  by  amending  fiscal 
incentives 
interest 
(tax  deductions  on 
payments  and  low  annual  property  taxes) 
and reforming the rental market; 

•  stimulating  homebuilding  investment 
in the areas needing it most, taking into 
account demographic growth and focussing 
on urban areas where shortages exist; 

•  making 

it  easier  to  commercialise 
results  of  research,  development  and 
innovation 
the 
system  to  make  Sweden’s  high  level  of 
research  and  innovation  expenditure  more 
impactful and boost competitiveness; 

to  further  strengthen 

•  ensuring  net  greenhouse  gas  emission 
in 

targets  are  met, 
transport, land use and forestry; 

in  particular 

•  fostering the green economy to support 
competitive  advantage  and 
Sweden’s 
sustainable growth, in particular in energy-
intensive 
industries,  and  to  speed  up 
permitting procedures for renewable energy 
development; 

• 

investing  more  in  grid  capacity  to 
reduce  high  energy  costs  especially  in  the 
south,  and  provide  for  more  cross-border 
connections. There is also a need to cut red 
tape  and  incentivise  the  use  of  flexibility 

14 

 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Fiscal 

A1.  Fiscal surveillance and debt sustainability 

A2.  Taxation 

Productivity 

A3. 

Innovation to business 

A4.  Making business easier 

A5.  Capital markets, financial stability and access to finance 

A6.  Effective institutional framework 

Sustainability 

A7.  Clean industry and climate mitigation 

A8.  Affordable energy transition 

A9.  Climate adaptation, preparedness and environment 

Fairness 

A10.  Labour market 

A11.  Social policies 

A12.  Education and skills 

A13.  Social Scoreboard 

A14.  Health and health systems 

Horizontal 

A15.  Sustainable development goals 

A16.  CSR progress and EU funds implementation 

A17.  Competitive regions 

LIST OF TABLES 

General government balance and debt 
Net expenditure growth 
Net expenditure growth (outturn and forecasts), annual and cumulated deviations vis-à-vis the recommendation 
Defence expenditure 

A1.1. 
A1.2. 
A1.3. 
A1.4. 
A1.5.  Macroeconomic developments and forecasts 
A1.6. 
A1.7. 
A1.8. 
A1.9. 

General government budgetary position 
Debt developments 
RRF – Grants 
Projected change in age-related expenditure in 2024-2040 and 2024-2070 

17 

19 

19 

25 

28 

28 

32 

36 

44 

49 

49 

55 

61 

67 

67 

70 

73 

77 

78 

81 

81 

83 

90 

20 
20 
21 
21 
21 
22 
22 
23 
23 

 
 
 
Financial indicators 
Sweden. Selected indicators on administrative burden reduction and simplification 
Digital Decade targets monitored by the Digital Economy and Society Index 
Key clean industry and climate mitigation indicators: Sweden 
Key Energy Indicators 
Key indicators for progress on climate adaptation, preparedness and environment 

A1.10.  Fiscal Governance Database Indicators 
A2.1. 
Taxation indicators 
A3.1. 
Key innovation indicators 
A4.1.  Making Business Easier: indicators. 
A5.1. 
A6.1. 
A6.2. 
A7.1. 
A8.1. 
A9.1. 
A13.1.  Social Scoreboard for Sweden 
A14.1.  Key health indicators 
A16.1.  Selected EU funds with adopted allocations - summary data (million EUR) 
A16.2.  Summary table on 2019-2024 CSRs 
A17.1.  Selection of indicators at regional level in Sweden 

LIST OF GRAPHS 

Tax revenue shares in 2023 
Tax wedge for single and second earners, % of total labour costs, 2024 

A2.1. 
A2.2. 
A4.1.  Making Business Easier: selected indicators. 
A5.1. 
Net savings-investment balance 
A5.2. 
International investment position 
A5.3. 
Capital markets and financial intermediaries 
A5.4. 
Composition of NFC funding as % of GDP 
A5.5. 
Composition of household financial assets per capita and as % of GDP 
A6.1. 
Trust in justice, regional / local authorities and in government 
A6.2. 
Indicators of Regulatory Policy and Governance (iREG) 
A6.3. 
Participation rate of 25-64 year olds in adult learning (%) by occupation 
A7.1. 
GHG emission intensity of manu-facturing and energy-intensive sectors, 2022 
A7.2.  Manufacturing industry production: total and selected sectors, index (2021 = 100), 2017-2023 
A8.1. 
Retail energy price components for household and non-household consumers, 2024 
A8.2.  Monthly average day-ahead wholesale electricity prices and European benchmark natural gas prices (Dutch TTF) 
A8.3. 
Sweden’s installed renewable capacity (left) and electricity generation mix (right) 
A9.1. 
Direct dependency(1) on ecosystem services(2) of the gross value added generated by economic sector in 2022 
A9.2. 
Investment needs and gaps in EUR million, in 2022 constant prices 
A10.1.  Key rates: employment, unemployment, long-term unemployment, NEETs 
A10.2.  Labour market outcomes of young people - Sweden 
A10.3.  Labour market slack - Sweden 
A11.1.  Share of people at risk of poverty or social exclusion (AROPE) (%) for different population groups 
A11.2.  Housing situation (housing cost overburden and overcrowding rate) 
A12.1.  Underachievement trends in mathematics, reading and science in Sweden. PISA 2012 to 2022 (%) 
A12.2.  Employment rate by educational attainment (annual) - Sweden 
A14.1.  Life expectancy at birth, years 
A14.2.  Treatable mortality 
A15.1.  Progress towards the SDGs in Sweden 
A16.1.  Distribution of RRF funding in Sweden by policy field 
A16.2.  Distribution of cohesion policy funding across policy objectives in Sweden 
A17.1.  Labour productivity per hour 

LIST OF MAPS 

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

24 
26 
31 
35 
43 
45 
46 
54 
60 
66 
77 
78 
86 
87 
90 

25 
26 
33 
36 
37 
37 
40 
41 
44 
45 
47 
51 
51 
55 
56 
58 
64 
64 
67 
68 
69 
70 
71 
74 
76 
78 
78 
81 
84 
84 
90 

94 

18 

 
 
 
 
FISCAL 
ANNEX 1: FISCAL SURVEILLANCE AND DEBT SUSTAINABILITY 

This  Annex  contains  a  series  of  tables  relevant  for  the  assessment  of  the  fiscal  situation  in  Sweden, 
including  how  Sweden  is  responding  to  Council  recommendations  issued  under  the  reformed  Economic 
Governance Framework. 

The  reformed  framework,  which  entered  into  force  on  30  April  2024(16),  aims  to  strengthen  debt 
sustainability  and  promote  sustainable  and  inclusive  growth  through  growth-enhancing  reforms  and 
priority investments. The medium-term fiscal-structural plans (hereinafter, MTPs or plans) constitute the 
cornerstone  of  the  framework,  setting  the  budgetary  commitment  of  Member  States  over  the  medium 
term. The latter is defined in terms of net expenditure growth, which is the single operational indicator for 
fiscal surveillance.  

Sweden submitted its plan on 11 October 2024. The plan covers the period until 2028, presenting a fiscal 
adjustment  over  four  years.  On  21  January  2025,  the  Council  adopted  the  Recommendation  endorsing 
Sweden’s plan(17).  

The  assessment  of  the  implementation  of  the  Council  Recommendation  endorsing  Sweden’s  plan  is 
carried  out  on  the  basis  of  outturn  data  from  Eurostat  and  the  Commission  Spring  2025  Forecast  and 
taking  into  account  the  Annual  Progress  Report  (APR),  that  Sweden  submitted  on  30  April  2024. 
Furthermore, in the context of the Commission Communication of 19 March 2025(18), on accommodating 
defence  expenditure  within  the  Stability  and  Growth  Pact,  the  annex  reports  the  projected  increase  in 
defence expenditure based on the Commission Spring 2025 Forecast.  

The Annex is organised as follows. First, developments in government deficit and debt are presented 
based  on  the  figures  reported  in  Table  A1.1.  Then,  the  assessment  of  the  implementation  of  the 
Council  Recommendation  endorsing  the  plan  follows,  based  on  the  relevant  figures  presented  in 
Tables A1.2 to A1.8, including data on defence expenditure. 

The Annex also provides information on the cost of ageing and the national fiscal framework. Fiscal 
sustainability risks are discussed in the Debt Sustainability Monitor 2024(19). 

Developments in government deficit and debt  

Sweden’s general government deficit amounted to 1.5% of GDP in 2024. Based on the Commission Spring 
2025  Forecast,  it  is  projected  to  remain  at  1.5%  of  GDP  in  2025.  The  government  debt-to-GDP  ratio 
amounted to 33.5% at the end of 2024 and, according to the Commission, it is projected to increase to 
34.8% end-2025. 

(16)  Regulation (EU) 2024/1263 of the European Parliament and of the Council (EU) on the effective coordination of economic policies 
and on multilateral budgetary surveillance, together with the amended Regulation (EC) No 1467/97 on the implementation of the 
excessive deficit procedure, and the amended Council Directive 2011/85/EU on the budgetary frameworks of Member States are the 
core elements of the reformed EU economic governance framework. 

(17)  OJ C/2025/644, 10.2.2025, ELI: http://data.europa.eu/eli/C/2025/644/oj 

(18)  Communication  from  the  Commission  accommodating  increased  defence  expenditure  within  the  Stability  and  Growth  Pact of  19 

March 2025, C(2025) 2000 final. 

(19)  Commission (2025) ‘Debt Sustainability Monitor 2024,’ European Economy-Institutional Papers 306. 

19 

 
 
 
 
 
Table A1.1:  General government balance and debt 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

Developments in net expenditure  

The net expenditure(20) growth rate of Sweden in 2025 is forecast by the Commission(21) to be below the 
recommended  maximum.  Considering  2024  and  2025  together,  also  the  cumulative  growth  rate  is 
projected to be below the recommended maximum.  

Table A1.2:  Net expenditure growth 

* The cumulative growth rates are calculated by reference to the base year of 2023. 
Source: Council Recommendation endorsing the national medium-term fiscal-structural plan of Sweden (Rec.) 

General government defence expenditure in Sweden amounted to 1.3% of GDP in 2021, 1.7% of GDP in 
2022  and  1.8%  of GDP  in  2023(22).  According  to the Commission  Spring  2025 forecast,  expenditure  on 
defence is projected at 2.3% of GDP in 2024 and at 2.5% of GDP in 2025. 

(20)  Net expenditure is defined in Article 2(2) of Regulation (EU) 2024/1263 as government expenditure net of (i) interest expenditure, 
(ii) discretionary revenue measures, (iii) expenditure on programmes of the Union fully matched by revenue from Union funds,  (iv) 
national  expenditure  on  co-financing  of  programmes  funded  by  the  Union,  (v)  cyclical  elements  of  unemployment  benefit 
expenditure, and (vi) one-off and other temporary measures.  

(21)  Commission Spring 2025 Forecast, European Economy-Institutional paper 318, May 2025. 

(22)  Eurostat, government expenditure by classification of functions of government (COFOG) 

20 

2024OutturnAPRCOMAPRCOM1General government balance% GDP-1.5-1.3-1.5n.a.-0.82General government gross debt% GDP33.534.333.8n.a.33.3Variables20252026RECAPRCOMRECAPRCOM2024n.a.6.1%6.1%n.a.n.a.n.a.20254.0%4.1%1.7%10.7%10.5%7.9%20264.4%n.a.2.6%15.5%n.a.10.7%AnnualCumulative*Growth rates 
 
                                     
 
 
                                     
 
 
 
 
Table A1.3:  Net expenditure growth (outturn and forecasts), annual and cumulated deviations vis-à-vis 
the recommendation 

* The growth rate for 2024 is not a recommendation but serves to anchor the base, as the latest year with outturn data when 
setting the net expenditure path is year 2023.  

Source: Commission Spring 2025 Forecast and Commission’s calculation 

Table A1.4:  Defence expenditure 

Source: Eurostat (COFOG) and Commission Spring 2025 Forecast  

Table A1.5:  Macroeconomic developments and forecasts 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

21 

2023202420252026OutturnOutturnCOMCOM1Total expenditurebn NAC3066.13223.63279.03350.92Interest expenditurebn NAC44.041.147.341.33Cyclical unemployment expenditurebn NAC6.111.213.611.94Expenditure funded by transfers from the EUbn NAC11.69.513.16.25National co-financing of EU programmesbn NAC1.61.67.07.06One-off expenditure (levels, excl. EU funded)bn NAC0.00.00.00.07=1-2-3-4-5-6Net nationally financed primary expenditure (before discretionary revenue measures, DRM)bn NAC3002.73160.13198.03284.58Change in net nationally financed primary expenditure (before DRM)bn NAC157.337.986.59DRM (excl. one-off revenue, incremental impact)bn NAC-25.9-15.42.210=8-9Change in net nationally financed primary expenditure (after DRM) bn NAC183.253.384.311Outturn / forecast net expenditure growth% change6.10%1.7%2.6%12Recommended net expenditure growth*% change6.4%4.0%4.4%13=(11-12) x 7Annual deviationbn NAC-9.0-73.1-56.414 (cumulated from 13)Cumulated deviationbn NAC-9.0-82.0-138.415=13/17Annual balance% GDP-0.1-1.1-0.816=14/17Cumulated balance% GDP-0.1-1.2-2.017p.m. Nominal GDP  bn NAC6212.16447.56627.56869.9Variables2021202220232024202520261Total defence expenditure% GDP1.31.71.82.32.52.92of which: gross fixed capital formation% GDP0.30.40.40.60.60.72024OutturnAPRCOMAPRCOM1=7+8+9Real GDP% change1.02.11.1n.a.1.92Private consumption% change0.32.01.3n.a.2.13Government consumption expenditure% change1.21.01.3n.a.0.44Gross fixed capital formation% change-1.12.51.0n.a.2.05Exports of goods and services% change2.32.92.0n.a.1.96Imports of goods and services% change1.72.31.8n.a.1.3Contributions to real GDP growth 7- Final domestic demandpps0.21.71.2n.a.1.58- Change in inventoriespps0.3-0.1-0.2n.a.0.09- Net exportspps0.40.50.1n.a.0.410Output gap% pot GDP-1.7-1.6-1.9n.a.-1.411Employment % change-0.30.10.2n.a.0.512Unemployment rate%8.48.68.7n.a.8.413Labour productivity% change1.32.00.9n.a.1.414HICP % change2.02.12.2n.a.1.615GDP deflator% change2.81.81.7n.a.1.716Compensation of employees per head% change4.72.93.7n.a.3.517Net lending/borrowing vis-à-vis the rest of the world% GDP7.1n.a.6.8n.a.7.020252026Variables 
 
                                     
 
 
 
 
 
      
 
 
 
                                     
 
 
Table A1.6:  General government budgetary position 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

Table A1.7:  Debt developments 

* End of period.  
** The 'snow-ball' effect captures the impact of interest expenditure on accumulated general government debt, as well as the 
impact of real GDP growth and inflation on the general government debt-to-GDP ratio (through the denominator). The stock-flow 
adjustment includes differences in cash and accrual accounting (including leads and lags in Recovery and Resilience Facility grant 
disbursements), accumulation of financial assets, and valuation and other residual effects. 
Source: Commission Spring 2025 Forecast and Commission's calculation (COM), Annual Progress Report (APR) 

22 

2024OutturnAPRCOMAPRCOM1=2+3+4+5Revenue48.548.547.9n.a.48.0of which:2- Taxes on production and imports20.720.620.7n.a.20.73- Current taxes on income, wealth, etc.17.617.617.3n.a.17.44- Social contributions3.53.53.6n.a.3.65- Other (residual)6.86.86.4n.a.6.38=9+16Expenditure 50.049.749.5n.a.48.8of which:9- Primary expenditure49.449.148.8n.a.48.2of which:10- Compensation of employees 12.612.412.3n.a.12.411- Intermediate consumption8.48.38.5n.a.8.312- Social payments15.015.114.9n.a.14.513- Subsidies1.21.21.1n.a.0.914- Gross fixed capital formation5.45.65.5n.a.5.615- Other6.86.56.6n.a.6.516- Interest expenditure0.60.60.7n.a.0.618=1-8General government balance-1.5-1.3-1.5n.a.-0.819=1-9Primary balance-0.9-0.7-0.8n.a.-0.220Cyclically adjusted balance-0.5n.a.-0.5n.a.0.021One-offs0.00.00.0n.a.0.022=20-21Structural balance-0.5-0.4-0.4n.a.0.023=22+16Structural primary balance0.10.20.3n.a.0.6Variables (% GDP)202520262024OutturnAPRCOMAPRCOM1Gross debt ratio* (% of GDP)33.534.333.8n.a.33.32=3+4+8Change in the ratio (pps. of GDP)1.90.80.3n.a.-0.5Contributions**3Primary balance0.90.70.8n.a.0.24≈5+6+7'Snow-ball' effect-0.5-0.7-0.2n.a.-0.6of which:5- Interest expenditure0.60.60.7n.a.0.66- Real growth effect-0.3-0.7-0.4n.a.-0.67- Inflation effect-0.9-0.6-0.6n.a.-0.68'Stock-flow' adjustment1.50.7-0.3n.a.-0.120252026Variables 
 
                                     
 
 
 
 
                                     
 
 
Table A1.8:  RRF – Grants 

Source: Annual Progress Report 

Cost of ageing  

Total age-related spending in Sweden is projected to remain broadly stable over the medium-
to-long  term,  rising  slightly  from  24%  of  GDP  in  2024  to  24.5%  in  2070  (see  Table  A1.9). 
Beneath this overall stability lie opposing changes for the different components, with rising spending on 
long-term care and healthcare being mostly offset by lower pension and education expenditure.  

Public healthcare (23) expenditure is projected at 7% of GDP in 2024 (above the EU average of 
6.6%) and is expected to increase by 0.3 pps by 2040 and by a further 0.4 pps by 2070.  

Public  expenditure on  long-term  care (24)  is  projected  at  3.2% of  GDP  in  2024  (above  the  EU 
average  of  1.7%)  and  is  expected  to  increase  by  0.5 pps  of  GDP  by  2040  and  by  a  further 
0.7 pps by 2070. 

Table A1.9:  Projected change in age-related expenditure in 2024-2040 and 2024-2070 

Source: 2024 Ageing Report (EC/EPC) 

(23)  Key performance characteristics, recent reforms and investments are discussed in Annex 11 ‘Health and health systems’.   

(24)  The quality and the accessibility of the long-term care system are covered in Annex 9 ‘Social policies’. 

23 

Revenue from RRF grants (% of GDP)20202021202220232024202520261RRF grants as included in the revenue projectionsn.a.0.10.10.10.10.10.02Cash disbursements of RRF grants from EUn.a.0.00.00.00.00.30.320202021202220232024202520263Total current expenditure0.00.10.10.10.10.10.04Gross fixed capital formation0.00.00.00.00.00.00.05Capital transfers0.00.00.10.10.00.10.06=4+5Total capital expenditure0.00.00.10.10.00.10.020202021202220232024202520267Reduction in tax revenue0.00.00.00.00.00.00.08Other costs with impact on revenue0.00.00.00.00.00.00.09Financial transactions0.00.00.00.00.00.00.0Expenditure financed by RRF grants (% of GDP)Other costs financed by RRF grants (% of GDP)SE24.0-0.90.30.5-0.4-0.523.5SEEU24.30.50.30.4-0.30.925.2EUSE24.0-0.80.71.2-0.60.524.5SEEU24.30.20.60.8-0.41.325.6EUage-related expenditure 2024 (% GDP)change in 2024-2040 (pps GDP) due to:age-related expenditure 2040 (%GDP)pensionshealthcarelong-term careeducationtotalage-related expenditure 2024 (% GDP)change in 2024-2070 (pps GDP) due to:age-related expenditure 2070 (%GDP)pensionshealthcarelong-term careeducationtotal 
 
                                     
 
 
   
 
 
National fiscal framework 

The Swedish Fiscal Policy Council (SFPC) is a well-established but relatively small independent 
fiscal  institution  with  a  narrow  mandate,  which  could  benefit  from  enhanced  independence 
safeguards. It focuses on ex-post assessment of compliance with fiscal rules, whereas assessments of 
the  macroeconomic  forecast  underlying  the  government’s  budgetary  plans  are  performed  occasionally 
and  on  a voluntary  basis. It  keeps  a  rather  low  media  profile  and  has  relatively  limited  interaction  with 
Parliament.  Mandates  of  Board  members  are  shorter  than  the  electoral  cycle,  making  both  name 
recognition and build-up of institutional memory more difficult. Although the SFPC does not report many 
obstacles on access to information, no formal legal protection has been established. 

Table A1.10:Fiscal Governance Database Indicators 

The Country Fiscal Rule Strength Index (C-FRSI) shows the strength of national fiscal rules aggregated at the country level based 
on i) the legal base, ii) how binding the rule is, iii) monitoring bodies, iv) correction mechanisms, and v) resilience to shocks. The 
Medium-Term Budgetary Framework Index (MTBFI) shows the strength of the national MTBF based on i) coverage of the 
targets/ceilings included in the national medium-term fiscal plans; ii) connectedness between these targets/ceilings and the 
annual budgets; iii) involvement of the national parliament in the preparation of the plans; iv) involvement of independent fiscal 
institutions in their preparation; and v) their level of detail. A higher score is associated with higher rule and MTBF strength. 
Source: Fiscal Governance Database 

24 

2023SwedenEU AverageCountry Fiscal Rule Strength Index (C-FRSI)15.7114.52Medium-Term Budgetary Framework Index (MTBFI)0.800.73 
 
   
 
 
 
ANNEX 2: TAXATION 

This  annex  provides  an 
indicator-based 
overview  of  Sweden’s  tax  system.  It  includes 
information on: (i) the tax mix; (ii) competitiveness 
and  fairness  aspects  of  the  tax  system;  and  (iii) 
tax collection and compliance.  

in  Sweden  is  mostly  generated  from  low-carbon 
sources.  Sweden  has  reduced  energy  taxes  on 
fuels, and plans to abolish completely the aviation 
tax  in  Swedish  airports  to  promote  growth  and 
mobility in the country (Budget 2025). 

property 

including 

costs  are 

Sweden  has  a  relatively  low  rate  of  capital 
taxation, 
taxation. 
Revenues  from  property  taxation  are  low  at  the 
equivalent  of  1.0%  of  GDP  in  2023  (EU-average 
1.9%), as are recurrent property taxes, which were 
equivalent to 0.6% of GDP (against an EU-average 
of  1.0%).  Furthermore,  unlike  most  Member 
States,  mortgage 
fully 
interest 
deductible  in  Sweden.  Although  there  is  capital 
gains  tax  in  Sweden  on  the  sale  of  property,  this 
can normally be deferred through the purchase of 
a  new  property.  22/30  of  the  capital  gain  is 
taxable at a rate of 30%, and 50% of any loss is 
deductible.  This  loss  can  be  used  to  reduce  the 
purchase  tax  when  subsequently  buying  a  new 
property.  In the field of capital-gains taxation, the 
Swedish  RRP  includes:  (i)  a  plan  to  increase  the 
maximum  amount  of  deferrable  capital-gains 
taxation resulting from the sale of a dwelling (this 
was  implemented  on  1 July 2020);  and  (ii)  the 
ending  of  interest  payments  on  such  deferred 
capital  gains 
implemented  on 
1 January 2021). 

(this  was 

to 

as 

conducive 

The  Swedish  capital-taxation  system  can  be 
private 
considered 
investment.  Sweden  relies 
less  than  other 
Member  States  on  tax  expenditures  and  tax 
incentives to promote investment. Instead, it relies 
more  on  financial  instruments  such  as  loans  and 
guarantees,  as  well  as measures  to  promote  jobs 
and  skills.  Capital  gains  derived  from  the  sale  of 
shares,  including  the  right  to  sell  shares  in  the 
future  (and  capital  gains  from  other  securities  in 
resident  and  non-resident  companies)  are  not 
subject  to  tax  in  Sweden  provided  that  they 
constitute  a  business  holding.  Out  of  27  Member 
States,  Sweden  ranks  third  in  the  tax  complexity 
index  and therefore has one of the least complex 
corporate tax systems in the EU.   

Although they have declined in recent years, 
tax  revenues  in  Sweden  remain  relatively 
high  as  a  share  of  GDP  at  41.3%  in  2023 
compared  with  an  EU-average  of  39%.  They 
further  decreased  slightly  to  41.0%  in  2024.  The 
tax  mix  relies  heavily  on  labour  taxation,  which 
was equivalent to 24% of GDP in 2023, compared 
with an EU-average of 20%, while capital taxes as 
a  share  of  GDP  are  clearly  below the  EU  average 
(see  Table  A2.1).  To  increase  labour  supply,  the 
marginal  tax  rate  was  reduced  in  2025,  and 
reductions  in  the  earned  income  tax  deduction 
were  also  removed  (at  a  cost  for  2025  of  SEK 
4.71 billion, EUR 0.43 billion). 

Graph A2.1: Tax revenue shares in 2023 

Source: Taxation Trends Data, DG TAXUD 

Sweden  has  a  relatively  stringent  carbon-
taxation framework, although environmental 
taxes  as  a  share  of  GDP  are  slightly  below 
the  EU-average.  Environmental  taxes  are  low  in 
absolute  terms  in  Sweden  in  part  due  to  the 
country’s low emissions. However, carbon is priced 
stringently when one compares tax rates: Sweden 
has  the  fourth  highest  effective  average  carbon 
tax rate (adjusted for free allocation under the EU 
Emissions  Trading  System 
(ETS)  out  of  71 
countries that report to the OECD (25). This can be 
partially  explained  by  the  relatively  low  tax  base 
on which the tax is levied. For example, electricity 

(25)  78.58 Rate Unit: Real 2021 EUR/tCO2e (source: OECD Series 

on Carbon Pricing and Energy Taxation) 

25 

51.226.921.957.128.115.1Tax revenue shares in 2023, Sweden (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital 
 
      
 
 
 
 
 
Table A2.1:  Taxation indicators 

(1) Forward-looking effective tax rate (KPMG).       
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) Forecast value for 2023. For more details on the VAT gap, see European Commission, Directorate-General for Taxation and 
Customs Union, VAT gap in the EU - 2024 report,  https://data.europa.eu/doi/10.2778/2476549  
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, OECD 

Sweden has a high tax wedge (26) at all levels 
of  income,  in  particular  at  the  lowest  and 
highest  earnings  levels,  compared  with  the 
EU  average.  The  tax  wedge  of  low-income 
earners  at  50%  of  the  average  income  (37.3%  in 
2024)  is  particularly  high  compared  with  the  EU 
average  (31.8%;  see  Graph  A2.2  below).  Sweden 
has  introduced  a  number  of  measures  in  recent 
years to help low- and middle-income earners and 
pensioners. The 2025 budget includes tax cuts on 
labour  and  for  pensioners  by  strengthening  both 
the  ordinary  earned  income  tax  credit  and  the 
increased  basic  tax  credit.  The  tax  reductions 
mainly  target  full-time  workers  with  low  and 
medium  incomes,  and  include:  (i)  extending  the 
reduction in employer contributions to cover up to 
two  employees;  and  (ii)  raising  the  cap  for  the 
amount of compensation eligible for the reduction 
from  SEK  25,000  to  SEK 35,000  (EUR  2,300-
3,200).  Relatively  high  labour  taxation  is  coupled 
with a relatively high redistributive capacity of the 
system. In particular, in 2023, the Swedish tax and 

(26)  The  tax  wedge  is  defined  as  the  sum  of  personal  income 
social-security 
taxes  and  employee  and  employer 
contributions  net  of  family  allowances,  expressed  as  a 
percentage of total labour costs (the sum of the gross wage 
and social-security contributions paid by the employer). 

benefit system reduced inequality as measured by 
the Gini coefficient by 8.8 points. This reduction in 
income  inequality  was  greater  than  the  EU-
average of 7.7 points.  

Graph A2.2: Tax wedge for single and second 
earners, % of total labour costs, 2024 

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

Sweden  has  a  low  effective  tax  rate  on 
capital  compared  with  both  other  forms  of 
income  (such  as  employment  income)  and 
other  Member  States.  Sweden  does  not  have 
any inheritance or gift taxes. Furthermore, Sweden 

26 

37.339.141.549.439.1202530354045505550100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - SESingle earner - EU averageSecond earner -  SESecond earner -  EU averageSEMedian (EU-27)2010202120222023202420102021202220232024Tax structureTotal taxes (including compulsory actual social contributions) (% of GDP)43.142.842.541.341.037.840.239.739.0Taxes on labour (% of GDP)24.324.123.823.619.820.520.120.0of which, social security contributions (SSC, % of GDP)2.72.72.62.612.913.012.712.7Taxes on consumption (% of GDP)12.711.812.111.610.911.210.910.5of which, value added taxes (VAT, % of GDP)9.19.19.48.96.87.37.47.1Taxes on capital (% of GDP)6.16.86.66.27.18.58.78.5Personal income taxes (PIT, % of GDP)14.714.614.113.58.69.69.49.3Corporate income taxes (CIT, % of GDP)3.13.53.53.52.22.93.23.2Total property taxes (% of GDP)1.01.01.11.01.92.22.11.9Recurrent taxes on immovable property (% of GDP)0.70.70.70.61.11.11.00.9Environmental taxes (% of GDP)2.71.91.92.02.52.42.12.0Effective carbon rate in EUR per tonne of CO2 equivalentsNA110.2NA89.7NA86.0NA84.8Tax wedge at 50% of average wage (single person) (*)39.037.937.537.937.333.931.831.531.531.8Tax wedge at 100% of average wage (single person) (*)42.842.542.442.241.540.939.939.940.240.3Corporate income tax - effective average tax rates (1) (*)24.619.319.319.321.319.319.118.9Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)10.39.99.28.88.68.27.97.7Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)0.90.735.532.6VAT gap (% of VAT total tax liability, VTTL) (**)5.45.56.67.0Progressivity & fairnessTax administration & complianceBy tax baseSome tax typesSwedenEU-27 
 
 
      
 
   
 
has  one  of  the  largest  differences  in  the  OECD 
between  the  statutory  tax  rate  on  employment 
income  and  dividend  income  (at  8%  compared 
with  the  OECD  average  of  0.6%) (27).  This  may 
have the effect of using income-shifting methods 
income  as  capital 
to  re-classify  employment 
income.  Empirical  evidence  suggests  that  there 
has  been  extensive  profit  shifting  between  tax 
bases  in  Sweden  to  lower  taxation,  especially  by 
owners of closely controlled corporations (28).  

The  Swedish  tax  system  performs  relatively 
well  in  terms  of  tax  administration.  The  VAT 
compliance gap in 2022 at 5.5% is below the EU-
average  of  7%.  In  terms  of  tax  collection,  tax 
arrears were low at 0.7% of total  tax revenue. At 
the same time, there are issues with digitalisation 
and  Sweden  has  the  lowest  e-filing  rates  for 
businesses  in  the  EU  at  63.3%.  Tax-compliance 
costs for SMEs are relatively high, and well above 
the  EU  average.  No  special  measures  have  been 
implemented to reduce the CIT compliance burden 
for  SMEs.    Sweden’s  cost-of-collection  ratio  has 
been  stable  during  recent  years,  amounting  to 
around  0.4%  of  total  revenue  between  2018  and 
2021. 

(27)  OECD Economic Surveys: Sweden 2023. 

(28)  Alstadstaeter and Jacobs, 2016. 

27 

 
 
 
 
PRODUCTIVITY 
ANNEX 3: INNOVATION TO BUSINESS  

to  handle 

Sweden  is  a  top  performer  in  research  and 
innovation 
(R&I),  but  needs  to  ensure 
adequate  R&D  investment,  scientific  and 
innovation production and supply of talent to 
maintain  its  position  (29).  Research,  innovation 
and education are central to Sweden’s productivity, 
societal 
prosperity  and  ability 
challenges (30).  The  2024  European  Innovation 
Scoreboard  ranks  Sweden  as  an 
‘innovation 
leader’,  performing  much  better  than  the  EU 
average (132.9%). While performance is above the 
average  of  the  innovation  leaders,  it  has  been 
increasing  less  than  the  EU  average  since  2017 
(+9.3  percentage  points  vs  +10  percentage 
points) (31). Strong performance is driven by one of 
the  highest  R&D 
(gross  domestic 
intensities 
expenditure  on  R&D  as  a  percentage  of  GDP)  in 
the EU (3.6% in 2023), having increased over the 
last  10  years  (3.12%  in  2014),  and  remains  well 
above  the  EU  average  and  close  to  international 
competitors such as the USA (3.45% in 2023) and 
in  2021) (32).  The  high 
above  China  (2.43% 
investment  in  R&D  is  however  not  fully  reflected 
when  it  comes to  scientific  outcomes  and  results, 
and  future  investment  might  be  hampered  by  a 
shortage  of  highly  skilled  staff 
in  science, 
technology  and  engineering.  Furthermore,  Sweden 
is  progressing  well 
in  business  digitalisation, 
particularly on the use of digital tools by small and 
medium-sized enterprises (SMEs). This contributes 
strongly to the EU Digital Decade targets (33). 

(29)  https://www.government.se/press-

releases/2024/12/excellent-research-and-innovation-are-
encouraged-in-largest-ever-research-and-innovation-bill/. 

(30)  Sweden’s Productivity Commission. Interim report (SOU 

2024:29).  https://www.regeringen.se/rattsliga-
dokument/statens-offentliga-utredningar/2024/04/sou-
202429/.  

(31)  European Commission, 2024, European Innovation 

Scoreboard (EIS), country profile: Sweden, ec.europa.eu. 

(32)  Govt. Bill 2022/23: I Expenditure area 16, p. 209. Sweden is 
however falling short of its own target of 4% set as part of 
the Europe 2020 strategy (Govt. Bill 2020/21: I Expenditure 
area 16, p. 250). 

(33)  The Digital Decade policy programme sets out a pathway for 

the EU’s digital transformation, including concrete 
commitments from Member States to commonly achieve 
objectives (e.g. competitiveness, resilience, sovereignty) and 
digital targets by 2030. 

Science and innovative ecosystems 

institutions  and 

Sweden  can  count  on  a  robust  science  base, 
but 
its  global  scientific  excellence  has 
declined  slightly  over  time.  Its  science  system 
builds  on  a  well-established  network  of  public 
research 
is  supported  by 
numerous  R&I  funding  programmes.  Sweden’s 
public expenditure on R&D as a percentage of GDP 
is  the  fourth  highest  in  the  EU  (0.92%  vs  EU 
average  of  0.72%  in  2023)  and  above  the  USA 
(0.64%).  Nonetheless,  despite  a  high  number  of 
publications,  the  quality  of  research  outputs,  as 
measured  by  the  share  of  scientific  publications 
within  the  top  10%  most  cited  publications 
worldwide  as  a  percentage  of  total  publications, 
has  decreased  slightly  (from  12.9%  in  2017  to 
12.2%  in  2021).  While  this  is  still  well  above  the 
EU average (9.6%), Sweden is not included among 
the five countries with the highest citation impact 
in  the  OECD (34).  A  key  issue  across  the  Swedish 
research  system  is  a  lack  of  strategic  alignment, 
shared  priorities  and  clear  direction,  which 
constrains collective efforts (35). 

The  new  Swedish  Research  and  Innovation 
Bill  2025-28  envisages  a  boost  to  R&D 
expenditure and scientific  excellence. The Bill 
titled  ‘Research  and  innovation  for  the  future: 
Curiosity  and  benefit’  (36)  is  based  on  a  review  of 
the  current  research  system,  acknowledging  the 
complexity  of  having  multiple  funding  authorities, 
the  need  for  a  more  streamlined  funding  process 
and  a  more  coherent  system  from  research  to 
commercialisation.  It  also  foresees  a  significant 
overall  increase  in  the  research  budget (37).  The 

(34)  Sweden’s slight statistical decrease in citation impact is also 

due to other countries’ increase in citation impact, in 
particular from China. The Swedish Research Barometer 
2023, Vetenskapsrådet. 

(35)  OECD (2023): Public research funding in Sweden 

https://www.oecd.org/en/publications/public-research-
funding-in-sweden_9eb9a85b-en.html.  

(36)https://www.regeringen.se/pressmeddelanden/2024/12/excelle
nt-forskning-och-innovationskraft-premieras-i-den-storsta-
forsknings--och-innovationspropositionen-nagonsin/.  

(37)  The R&I Bill foresees a strong increase over the next four 

years, from SEK 1.5 bn in 2025 to SEK 2.5 bn in 2026, SEK 
4.0 bn in 2027, and to SEK 6.5 bn in 2028. 

28 

 
 
 
 
 
 
fields.  To 

technological 

aim  is  to  position  Sweden  among  the  foremost 
R&I  countries  and  as  a  leading  knowledge  nation. 
Excellence clusters are envisaged to promote long-
term cooperation for breakthrough technologies in 
various 
strengthen 
excellent  research,  strategic  priority  areas  have 
been  identified.  Specific  funding  allocations  are 
envisaged  for  the  development  of  advanced 
research  infrastructure,  life  sciences  and  health, 
strategic recruitment at universities and university 
colleges,  the  Science  Council,  including  excellence 
centres,  the  circular  bioeconomy  and  for  AI 
research.  With  the  aim  of  further  strengthening 
the focus on excellence, the government envisages 
increased  competition 
in  distributing  research 
funding to universities. 

Business innovation  

Sweden  is  home  to  a  thriving  high-tech 
innovation  ecosystem,  underpinned  by  high 
business  R&D  expenditure.  Its  business  R&D 
intensity of 2.67% in 2023, which is the highest in 
the  EU,  has  increased  slightly  over  the  last  10 
years and comes close to the level of international 
competitors such as the USA (2.7% in 2023). This 
is the result of investments by its innovative SMEs 
and  by  internationally  competitive  and  innovative 
large  companies.  According  to  the  2024  EU 
Industrial  R&D  Investment  Scoreboard,  Sweden 
has  achieved  above-average  R&D 
investment 
growth,  led  by companies  such  as  Ericsson, Geely 
Sweden  Holding  and  Volvo.  They 
together 
contributed  over  EUR  1.9  billion  in  R&D  spending. 
Its R&D ecosystem remains stable and diversified, 
with  notable  strengths  in 
ICT  hardware  and 
automotive.  Sweden’s  sectoral  diversification  is 
complemented  by  the  emergence  of  several 
innovative companies. The size of the ICT sector is 
above  the  EU  average  (7%  vs  5%  in  gross  value 
added in 2020), and its R&D business expenditure 
amounted  to  28.7%  of  total  R&D  expenditure  in 
2021. 
partly 
contributes  to  strengthening  the  research  efforts 
of  the  business  sector,  for  example  through  the 
Swedish  Innovation  Agency  (38).  The  government 
requested  an  investigation  into  the  current  R&D 

expenditure 

research 

Public 

(38)  A key example involves various strategic innovation 
programmes in areas of strategic importance: 
https://www.vinnova.se/en/m/strategic-innovation-
programmes/ . 

tax deduction framework (39). The proposed Budget 
Bill for 2025 intends to continue improving the tax 
conditions  that  support  companies’  opportunities 
to conduct R&D, including through exploring a new 
R&D tax incentive. 

The adoption of digital technologies by firms 
in  Sweden  is  strong.  The  take-up  rate  for  the 
combined  adoption  of  AI,  cloud  computing  and 
data  analysis  is  86.6%,  which  is  above  the  EU 
average  of  72.9%.  This  makes  a  significant 
contribution  to  the  related  EU  digital  targets  (see 
table below). 

in 

is  well 

reflected 

Strong  innovation  activities  are  particularly 
driven  by  the  important  role  of  SMEs  in 
innovation. As reported in the EU Industrial  R&D 
Investment  Scoreboard,  of  all  EU  countries, 
Sweden  has  the  highest  share  of  SMEs  (28.3%) 
among  the  top  900  R&D  investors  in  the  EU. 
Business  enterprise  expenditure  on  R&D  by  SMEs 
as a percentage of GDP is at a high level (0.52% in 
2021),  above  both  the  EU  (O.40%)  and  USA 
(0.30%).  This 
relevant 
indicators that measure innovation output in SMEs 
(e.g.  SMEs 
introducing  product  and  process 
innovation),  for  which  Sweden  ranks  well  above 
the EU average and shows improved performance. 
Furthermore,  Sweden  also  enjoys  a  relatively 
dynamic development in start-ups and is home to 
41 unicorns (ranking 9th in the world). The country 
has the third highest share in the EU of firms with 
innovations  that  are  new  to  the  country  or  the 
global  market  according  to  the  EIB  Investment 
Survey  2024 (40)  This  development  has  been 
driven  by  an  above  EU  average  level  of  venture 
capital  as  a  percentage  of  GDP  (0.141%  vs 
0.078%) and is helped by a strong support system. 
The  Swedish  National 
Incubator  Programme 
promotes innovation and business development by 
giving start-ups the support they need to grow and 
develop (41). The programme supports just over 30 
regional 
the 
country.  Sweden’s  overall  innovative  capacity  is 
also  underlined  by  a  high  number  of  patent 
applications (per billion of GDP), which stand at 7.6 
compared  to  an  EU  average  of  2.8.  However,  this 

innovation  environments  across 

(39)  Skatteincitament för forskning och utveckling. En översyn av 

FoU-avdraget och expertskattereglerna, SOU 2025:3. 

(40)https://www.eib.org/attachments/lucalli/20240238_econ_eibis

_2024_eu_en.pdf pp. 15 and 22. 

(41)  https://www.vinnova.se/m/inkubation-starker-sveriges-

innovations--och-fornyelseformaga/. 

29 

 
 
 
number has been decreasing over the last decade 
(9.4 in 2015).  

Strengthening  science-business  cooperation 
will  be  key  to  boosting  innovation  and 
competitiveness. The share of public expenditure 
on R&D financed by the business enterprise sector 
as  a  percentage  of  total  public  expenditure  on 
R&D,  which  is  an  important  indicator  of  public-
private  cooperation,  has  declined  since  2011  (to 
3.08%  in  2021),  and  Sweden  remains  below  the 
EU  average  (6.96%).  However,  Sweden  performs 
well  on  the  share  of  public-private  scientific  co-
publications  as  a  percentage  of  the  total  number 
of  publications 
in  2023),  which  has 
increased  slightly  since  2012  and  remains  above 
the EU average (7.7%) and the USA (8.9%).  

(12% 

Financing innovation  

increasing 

their  presence 

As  a  positive  framework  condition,  venture 
capital  represents  a  growing  funding  source 
for  finance  innovation  activities  in  Sweden. 
Venture capital expenditure has tripled since 2017, 
reaching 0.35% of GDP in 2024, which represents 
143.8%  of  the  EU  average.  International  venture 
capital  investors,  particularly  from  the  USA,  have 
been 
in  Sweden, 
attracted  by  its  entrepreneurial  business  culture 
and government-backed financial support of early 
stage  companies  (e.g.  Industrifonden,  Alm  Invest). 
Accompanied by tax reforms that target the needs 
of small, technology-based firms and the Swedish 
governance model, an appropriate risk culture has 
developed.  Early  stage  dominates the market;  ICT 
and  life  science  account  for  70%  of  venture  and 
growth  capital  funding  in  Sweden,  despite  these 
sectors only accounting for about 10% of the total 
economy. 

recent  improvements,  45%  of  companies  still 
consider  it  difficult  to  recruit  R&D  staff (42).  The 
number  of  new  doctoral  graduates  in  STEM  has 
gradually  declined  since  2017  (-46.3%  points). 
Increased  participation  and  interest  among  young 
people  in  STEM  education  would  be  key  to 
strengthening competitiveness and innovation, and 
matching skills needs (See Annex on Education and 
Skills).  Job-to-job  mobility  of  human  resources  in 
science and technology has been declining sharply 
since 2017 (-61.8% points) and is now below half 
of  the  EU  average.  Limited  labour  mobility  points 
to shortages in affordable housing and insufficient 
integration  of  low-skilled  workers  into  the  labour 
market (43).  In  order  to  strengthen  the  ability  to 
recruit the best researchers for excellent research, 
the  new  Swedish  Research  and  Innovation  Bill 
2025-28 
strategic 
recruitment,  with  the  focus  on  associate  senior 
lecturers.  This  includes  the  introduction  of  a  new 
career  support  grant  to  attract  talented  early 
career researchers. 

incentives 

improves 

for 

Sweden  has  a  well-developed  system  for 
close 
entrepreneurship  education,  with 
collaboration  between  the  public  sector, 
businesses  and  civil  society.  Entrepreneurship 
education is  embedded  in  the  Swedish  curriculum 
for  primary  and  secondary  education,  and  is 
rapidly  growing  in  higher  education  as  well. 
Besides 
close 
learning, 
collaboration between schools, civil society and the 
business world to provide quality entrepreneurship 
instance, 
education.  For 
the  successful  Ung 
företagsamhet 
(Junior  Achievement  Sweden) 
programme offered by a non-profit organisation is 
the  largest  nationwide  entrepreneurship  initiative 
for  schools,  reaching  631  schools  in  197  of 
Sweden’s 290 municipalities.  

formal 

there 

is 

Innovative talent 

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.  Despite 

(42)https://www.iva.se/contentassets/77c663c0a5654043ac20e0

6df3bcc8d8/iva-fou-barometern-2024.pdf. 

(43)  https://ec.europa.eu/assets/rtd/eis/2024/ec_rtd_eis-country-

profile-se.pdf. 

30 

 
 
Table A3.1:  Key innovation indicators 

(1) EU average for the last available year or the year with the largest number of country data. 
Source:  Eurostat, DG JRC, OECD, Science-Metrix (Scopus database), Invest Europe, European Innovation Scoreboard 

31 

R&D intensity (gross domestic expenditure on R&D as % of GDP)3.253.393.53.423.473.6:2.243.45Public expenditure on R&D as % of GDP1.040.970.960.940.910.92:0.720.64Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 13.412.912.112.2:::9.612.3Researchers (FTE) employed by public sector (Gov+HEI) per thousand active population3.84.14.34.24.3::4.2:International co-publications as % of total number of publications55.663.36767.967.967.7:55.939.3Business enterprise expenditure on R&D (BERD) as % of GDP2.22.422.532.472.562.67:1.492.7Business enterprise expenditure on R&D (BERD) performed by SMEs as % of GDP:0.47:0.52:::0.40.3Researchers employed by business per thousand active population5.910.110.914.614.815.2:5.7:Patent applications filed under the Patent Cooperation Treaty per billion GDP (in PPS €)9.99.78.687.6::2.8:Employment share of high-growth enterprises measured in employment (%)16.6617.7719.18::::12.51:SMEs with at least a basic level of digital intensity% SMEs (EU Digital Decade target by 2030: 90%)::::86.86:86.5672.91:Data analytics adoption% enterprises (EU Digital Decade target by 2030: 75%):::::34.96:33.17:Cloud adoption% enterprises (EU Digital Decade target by 2030: 75%):::69.17:66:38.86:Artificial intelligence adoption% enterprises (EU Digital Decade target by 2030: 75%):::9.92:10.3725.0913.48:Public-private scientific co-publications as % of total number of publications10.811.611.611.912.212:7.78.9Public expenditure on R&D financed by business enterprises (national) as % of GDP:0.039:0.029:::0.050.02Total public sector support for BERD as % of GDP:::0.14:::0.2040.251 R&D tax incentives: foregone revenues as % of GDP:0.0120.030.0380.0400.042:0.1020.141BERD financed by the public sector (national and abroad) as % of GDP :::0.102:::0.1000.110Venture capital (market statistics) as % of GDP, total (calculated as a 3-year moving average)0.0610.0440.090.1260.1570.141:0.078:Seed stage funding share (% of total venture capital)1.855.25.65.25.2:7.3:Start-up stage funding share (% of total venture capital)47.750.361.24942.339.6:44:Later stage funding share (% of total venture capital)50.644.733.645.452.555.2:48.7:New graduates in science and engineering per thousand population aged 25-3416.812.612.913.713.8::17.5:Graduates in the field of computing per thousand population aged 25-342.12.32.73.44.2::3.6:20222021Sweden201220172020Headline indicatorScience and innovative ecosystemsR&D investment & researchers employed in businessesPublic support for business innovationInnovation outputsDigitalisation of businessesAcademia-business collaborationFinancing innovationBusiness innovation enablers: Innovative talent2023EU average (1)USA2024 
 
 
            
 
ANNEX 4: MAKING BUSINESS EASIER 

Sweden 
is  a  business-friendly  economy, 
considered as one of the easiest countries in 
the  EU  to  start  a  business  in.  SMEs  benefit 
from low regulatory barriers, affordable access to 
transport 
finance,  and  good  digital  and 
infrastructure.  Sweden’s  regulatory  framework  is 
competition-friendly  for  almost  all  professional 
and  retail  services.  Nevertheless,  Sweden  could 
benefit from further integration into the EU single 
market. The lack of skilled staff, uncertainty about 
the  future  and  high  energy  costs  are  obstacles 
hindering  business  investments.  Furthermore,  late 
payments  from  both  private  and  public  sectors 
remain  a  concern  and  have  an 
impact  on 
bankruptcies. 

Economic framework conditions 

Sweden’s private investment is above the EU 
average  but  has  been  declining.  Net  fixed 
capital  formation  as  a  share  of  GDP  has  declined 
from 6.54% (2022) to 5.3% (2023) and 4.26% in 
2024, compared to EU average of 3.44%. Despite 
this decline, Sweden’s five-year average (5.71%) is 
still  higher  than  the  EU  average  (4.01%) (44).  To 
is 
turn 
incentives, 
considering  policies  such  as 
infrastructure 
education 
programmes 
investment.  Private 
investment  is  essential  to  supporting  Sweden’s 
economic  growth.  Greater  coordination  and  an 
acceleration of the simplification of the regulatory 
environment would help increase investment.  

the  government 

trend  around, 

development, 

to  boost 

tax 
and 

this 

Public investment has been increasing, and it 
is  above  the  EU  average.  In  2022,  it  stood  at 
1.47%  of  GDP,  increasing  to  1.57%  in  2023  and 
further  to  1.61%  in  2024,  compared  to  the  EU 
average  of  1.32%  share  of  GDP.  Furthermore, 
Sweden’s  five-year  average  of  1.63%  is  higher 
than the EU average of 1.01%, indicating a strong 
commitment to public investment (45). 

Foreign  direct  investment  (FDI)  showed  a 
decline  but  remains  high.  Sweden's  FDI  fell  by 
34 per cent from the record year of 2022 to EUR 
30  billion)  but  the  figure  remains  high (46).  Weak 

(44)  AMECO 

(45)  AMECO 

(46)  Sweden FDI 

demand in the global economy, rising uncertainty, 
and  geopolitical  tensions  are  holding  back  FDI 
performance. 

The  main  obstacles  to 
investment  are 
availability  of  skilled  staff,  uncertainty 
about  the  future  and  high  energy  costs. 
According  to  the  EIB  Investment  Survey (47),  the 
three  main  obstacles  to  investment  for  Swedish 
businesses  are  the  availability  of  skilled  staff 
(78%  vs  EU  average  77%),  uncertainty  about 
future  economic  conditions  (78%  vs  EU  average 
79%)  and  high  energy  costs  (59% vs  EU  average 
77%).  Addressing  these  obstacles  is  crucial  to 
ensuring  a  favourable  business  environment  and 
maintaining 
and 
prosperity. 

competitiveness 

Sweden’s 

to 

access 

finance, 

Compared  to  other  EU  countries,  Swedish 
firms  are  less  likely  to  consider  business 
and 
regulations, 
digital/transport  infrastructure  as  obstacles 
to  investing.  According  to  the  EIB  Investment 
Survey (48),  fewer  Swedish  firms  (51%)  identify 
business  regulations  as  a  barrier  than  the  EU 
average  (66%).  They  are  less  likely  to  face 
financing  issues  (33%  vs  45%  EU  average). 
transport 
Similarly, 
infrastructure 
(38%  vs  EU  45%)  or  digital 
infrastructure (25% vs EU 41%) as a barrier. 

they  do  not 

consider 

Swedish  businesses  face  slightly  higher 
payment  delays  than  the  EU  average.  The 
business-to-business  payment  gap has  been 
increasing  since  2021  and  now  stands  at  16.7 
days,  compared  to  the  EU  average  of  15.5  day. 
Similarly, the payment gap for payments from the 
public sector has been increasing since 2021 (13.4 
days)  and  by  2024  was  higher  than  the  EU 
average  (17.9  vs  EU  average  of  15.2  days) (49). 
This  trend  impacts  SMEs  negatively.  According  to 
the 2024 Intrum payment report, there has been a 
deterioration in payment performance in business-
to-business transactions (50). 

(47)  EIB Investment Survey 2024 

(48)  EIB investment Survey 2024 

(49)  European Payment Report 2024 | Intrum 

(50) Intrum Payment Report 2024  

32 

 
 
 
 
 
Graph A4.1: Making Business Easier: selected 
indicators. 

Share of (1) enterprises, (2) average intra-EU exports and 
imports in GDP, (3) firms, (4) SMEs. 
Sources: (1) EIB IS, (2) Eurostat, (3) ECFIN BCS, (4) SAFE 
survey. 

Material shortages are a concern in Sweden. 
In  2024,  20.7%  of  firms  in  Sweden  experienced 
material  shortages,  exceeding  the  EU  average  of 
10% (51).  This  weak  resilience  stands  out  as  a 
trend  over  a  five-year  period,  with  29.4%  of 
Swedish 
reporting  material  shortages 
compared to the EU average of 17.8%. 

firms 

Sweden  continues  to  improve  its  digital 
infrastructure,  including  through  its  RRP.  5G 
coverage  in  Sweden  has  made  substantial 
progress  over  recent  years.  Sweden  is  very 
active  in  deploying  connectivity  infrastructure.  A 
large  proportion  of  households  already  have 
access  to  fibre  and  5G  networks;  however,  the 
most  remote  households  will  be  the  costliest  to 
connect 
to  a  very  high-capacity  network 
(VHCN). By 2024, Sweden’s 5G coverage continued 
to  increase,  with  65.5%  of  households  accessing 
the  vital  3.4-3.8  GHz  band.  Cybersecurity 
awareness  is  rising  among  Swedish  businesses: 
ICT security incident rates slightly fell from 3.77% 

(51)  ECFIN BCS 

in  2022  to  3.70%  in  2024,  still  above  the  EU 
implemented  security 
average.  While  92.65% 
measures,  67.10%  enterprises  trained  employees 
on their ICT security obligations, surpassing the EU 
average. 

Regulatory and administrative 
barriers 

Sweden is a business-friendly economy, with 
fewer  regulatory  obstacles  than  the  EU 
average.  In  2023,  just  10%  of  Swedish  firms 
cited  business  regulations  as  a  major  barrier  to 
investment,  compared  to  22.2%  in  the  EU.  In 
2024, 9.1% of Swedish firms identified regulation 
as  a  major  barrier  for  investment,  substantially 
lower than the EU average of 24.5% (52). 

The  number  of  bankruptcies  is  rising  in 
Sweden (53). Over the past five years, Sweden has 
had a slightly higher rate of insolvencies than the 
EU  average,  with  Sweden at  124.9  and  the  EU  at 
122.5. This rate has been increasing, starting from 
the base figure of 100 in 2020 and rising to 105.6 
(2022), then 127.8 (2023), before reaching 166.2 
in 2024. Meanwhile, the EU average was 143.1 in 
2024.  The  number  of  business  registrations  over 
the past five years is 89.9, where 100 is the 2020 
base  figure,  versus  the  EU  average  of  98 (54), 
indicating  a  weak  business  dynamism  (see  Annex 
7). 

Single market 

face 

firms 

fewer 

regulatory 
Swedish 
obstacles to entry and expansion. According to 
the  OECD  2023-2024  product  market  regulation 
regulatory 
indicators 
framework is competition-friendly in almost all the 
areas  covered  by  the  PMR  indicators.  However, 
there is still room to improve the mechanisms for 
assessing  the  impact  on  competition  of  new  and 

(PMR) (55), 

Sweden’s 

(52)  EIBIS. Regulatory Obstacles 

(53) Statistics | Eurostat. Bankruptcies 

(54)  Eurostat. Business Registrations 

(55) Sweden_PMR country note 

33 

38.513.420.730.39.147.916.61041.624.50102030405060from private entitiesfrom public entitiesMaterial shortages as afactor limiting productionEU Trade IntegrationRegulation as a majorobstacle to investment(4) Late payments(3) Shortages(2) SingleMarket(1) RegulatoryburdenShare (%)EU27SE 
     
 
 
54.1% of the cases it received on problems faced 
by  EU  nationals  in  Sweden,  compared  to  the  EU 
average of 85%. The low-resolution rate is due to 
recurrent  delays  and  difficulties 
to  obtain 
residence  documents.  Without  these  cases  the 
resolution rate would have been above 80%. 

Public procurement 

for 

Increased  enforcement  power 
the 
Swedish  Competition  Authority  (SCA).  As  of 
1 January  2024,  the  SCA  has  been  vested 
with  greater  powers  to  supervise  public 
reforms  aim  at 
procurement.  The  2024 
enhancing  the  efficiency  of  Sweden’s  public 
procurement  review  system  by  granting  the  SCA 
direct  power  to 
impose  fines  without  court 
approval,  doubling  the  maximum  fine  to  EUR  1.8 
million and extending the enforcement period from 
one  to  two  years.  These  changes  could  help  to 
ensure 
improve 
enforcement 
faster 
compliance and deterrence. 

and 

laws. 

Despite 

Sweden’s 

existing 
sound 
performance in the PMR indicators, improvements 
can  be  still  made  in  the  regulatory  framework  in 
the  e-communications,  air  transport,  and  natural 
gas sectors. 

in 

less  strictly 
Professional  services  are 
regulated 
the  average  OECD 
than 
economy,  except  for  real  estate  agents.  This 
is  partially  explained  by  the  fact  that  real  estate 
agents  manage  the  conveyancing  process 
in 
Sweden,  a  task  typically  handled  by  notaries  or 
in  other  countries.  According  to  the 
lawyers 
Restrictiveness Indicator (RI) (56), restrictions on the 
profession of real estate agent are well above the 
EU average (3.18 in 2021 vs EU average 1.30). 

Sweden  is  an  open  economy  that  could 
benefit from further integration into the EU. 
Intra-EU imports and exports are 30% of Swedish 
GDP  (compared  to  the  EU  average  of  42.14%  in 
2024) (57). Sweden's intra-EU service exports stood 
at  represented  9.8%  of  GDP  in  2024,  against 
versus  an  EU  average  of  14.7%.  Sweden  could 
achieve  greater  integration  by  reducing  obstacles 
and strengthening collaboration. 

Sweden’s  performance  in  transposing  single 
market  directives  and  handling  infringement 
proceedings  is  better  than  the  EU  average. 
Sweden’s  transposition  deficit  stands  at  0.4%, 
lower than the EU average of 0.8%. This suggests 
in 
that  Sweden  has  been  more  efficient 
transposing  single  market  directives 
its 
into 
national  laws,  demonstrating  its  commitment  to 
EU  rules.  Sweden’s  performance  is  also  reflected 
in  the  average  delay  in  transposing  directives  (9 
months, less than the EU average of 11.9 months), 
and  the  rate  of  incorrect  transpositions  (0.8%) 
which  is  lower  than  the  EU  average  (0.9%).  In 
December  2024,  Sweden  had  19  pending 
infringement  procedures,  a  significantly 
lower 
number compared to the EU average of 24, with a 
focus  on  direct  taxation  and  financial  services. 
of 
Nevertheless, 
infringement  proceedings 
(51.1 
months)  is  higher  than  the  EU  average  (45.8 
In  2024,  SOLVIT(58)  Sweden  solved 
months). 

for  Sweden 

duration 

average 

the 

(56)  Recommendations for regulation in professional services. 

COM(2021) 385 final 

(57)  Trade integration. Eurostat 

(58)  Single Market scoreboard Sweden 

34 

 
 
 
Table A4.1:  Making Business Easier: indicators. 

*Change in methodology in 2024: reporting late payments from public and private entities separately. 
**The 2024 data on single bids is provisional and subject to revision. Please note that approximately 46% of the total data is 
currently missing, which may impact the accuracy and completeness of the information. Due to missing data, the EU average of 
direct awards data is calculated without Romania. 
Sources: (1) ECFIN BCS, (2) Eurostat, (3) EIB IS, (4) Digital Decade Country reports, (5) Intrum Payment Report, (6) SAFE survey, 
(7) OECD, (8) the Single Market and Competitiveness Scoreboard. 

35 

POLICY AREA20202021202220232024EU-27 average10.625.354.735.420.710.03.38.418.614.111.320.21.82.53.22.72.62.33.66.49.08.03.313.4-82.581.688.5-78.8-82.581.583.9-64.0-17.720.590.3-89.3Regulatory environment7.69.210.09.99.124.518.615.412.316.016.715.617.713.413.414.917.915.1from public or private entities in the last 6 months29.235.231.744.5--from private entities in the previous or current quarter----38.547.9from public entities in the previous or current quarter----13.416.624.025.829.930.730.341.60.0390.0390.0390.0390.0450.0500.72.00.70.50.40.81.61.01.10.80.80.962.770.668.369.054.184.924.018.020.019.019.024.4910131127-011127.0SwedenINDICATOR NAMEInvestment climateShortagesMaterial shortage, firms facing constraints, %1Labour shortage, firms facing constraints, %1Vacancy rate, vacant posts as a % of all available ones (vacant + occupied)2InfrastructureTransport infrastructure as an obstacle to investment, % of firms reporting it as a major obstacle3VHCN coverage, %4FTTP coverage, %45G coverage, %4Reduction of regulatory and administrative barriersImpact of regulation on long-term investment, % firms reporting business regulation as a major obstacle3Late paymentsPayment gap - corporates B2B, difference in days between offered and actual payment5Payment gap - public sector, difference in days between offered and actual payment5Share of SMEs experiencing late payments, %*6Single MarketIntegrationEU trade integration, % (Average intra-EU imports + average intra EU exports)/GDP2EEA Services Trade Restrictiveness Index7ComplianceTransposition deficit, % of all directives not transposed8Conformity deficit, % of all directives transposed incorrectly8SOLVIT, % resolution rate per country8Number of pending infringement proceedings8Competition and transparency in public procurementSingle bids, % of total contractors**8Direct awards, %**8Public procurement 
 
 
 
 
       
 
ANNEX 5: CAPITAL MARKETS, FINANCIAL STABILITY AND ACCESS TO FINANCE 

Graph A5.1: Net savings-investment balance 

Source: AMECO. 

Consistent with its position as a net creditor 
to  the  rest  of  the  world,  the  Swedish 
economy has accumulated significant foreign 
assets  and 
positive  net 
exhibits  a 
international  investment  position.  As  of  Q3-
2024, total assets on foreigners reached 360% of 
GDP,  while  liabilities  to  foreigners  stood  at  307% 
of GDP, resulting in a net international investment 
position  (NIIP)  equivalent  to  52.4%  of  GDP  (see 
Graph A5.2). The accumulated portfolio investment 
and  net  foreign  direct  investment,  which  reached 
respectively  19.2%  of  GDP  and  18.4%  of  GDP  as 
of  Q3-2024,  accounted  for  most  of  the  NIIP.  The 
net portfolio investments, which are also affected 
by  the  price  volatility  of  equity  valuations  abroad 
(assets)  and  in  Sweden  (liabilities),  were  negative 
until 2020, but turned positive afterwards (caused 
by  an  increase  in  equity  and  investment  fund 
shares  and  long-term  debt  securities).  Non-bank 
financial  institutions  hold  the  bulk  of  net  foreign 
assets,  while  banks  and  NFCs  are  the  main  net 
external debtors. Sweden’s foreign currency assets 
are  almost  three  times  as  high  as  its  foreign 
currency  liabilities,  providing  a  hedge  against 
currency  valuation  changes.  Despite  being  a 
floating  exchange  rate  regime,  it  is  important  to 
maintain adequate foreign reserves in view of the 
high  dependence  of  commercial  banks  on 
in  foreign  currency,  and 
wholesale  funding 
potential disruptions in such funding during global 
financial  distress.  Although  rollovers  of  external 
debt  (which  include  banks’  covered  bonds)  pose 
some vulnerability,  risks  are  moderated  by banks’ 
ample  liquidity  and  large  capital  buffers  (see 
below). 

is 

The  Swedish  banking  system 
large, 
concentrated  and  interconnected  with  the 
non-bank financial sector, the relative share 
of  which  is  increasing.  The  funding  of  the 
largest Swedish banks depends on depositors and 
on wholesale funding both from the domestic and 
the  international  capital  markets.  Loan  losses  are 
limited-  Although  subsiding  somewhat,  systemic 
financial  risks  remain  elevated  due  to  high  levels 
of  private  debt  and  banks’  high  exposure 
residential  and  commercial  real  estate.  Although 
banks' 
risks, 
they  stand  are 
macroprudential  policies  as 
appropriate  to  ensure  resilience  of  the  macro-
economy.  Swedish  companies  have  some  of  the 
best  access  in  the  EU  to  diverse  and  innovative 
financing  sources,  not  only  through  bank  funding, 
but  also  increasingly  through  equity  and  bond 
market  funding.  Sweden’s  capital  markets  are 
highly integrated with the business sector and play 
a  vital  role  in  raising  venture  and  growth  capital 
and  funding 
to  businesses.  Swedish  capital 
markets  also  offer  a  wide  array  of  investment 
alternatives to professional and retail investors.  

resilience  mitigates 

strong 

Availability and use of domestic 
savings 

The  Swedish  economy  invests  the  largest 
part of its relatively high net savings abroad. 
In the last decade, the private savings ratio, net of 
fixed  capital  consumption,  persistently  fluctuated 
around  its  ten-year  average  of  10.6%  of  GDP, 
reaching a maximum of 14.2% in 2020 (see Graph 
A5.1).  The  net  private  investment  ratio,  which 
measures the net contribution of the private sector 
in  the  country,  was 
to  capital  accumulation 
significantly  more  volatile,  exhibited  a  ten-year 
average of 6.6% of GDP and reached a maximum 
of  7.7%  in  2022.  At  the  same  time,  during  the 
same  period  the  government  budget  was  in 
regular  deficit,  averaging  0.2%  of  GDP.  Thus,  the 
high  positive  balance  between  net  domestic 
savings  and  net  investment,  together  with  the 
government  deficits,  resulted  in  structural  net 
lending  by  Sweden  to  foreigners,  averaging  3.9% 
of GDP, with a peak of 6.6% in 2021. Hence, most 
of  Swedish  net  savings,  i.e.  after  accounting  for 
the  investments  that  are  necessary  to  merely 
maintain  the  existing  capital  structure  of  the 
economy, are used to finance projects abroad. 

36 

-10-50510152025302017201820192020202120222023% of GDPPrivate investment, netLending to the governmentPrivate saving, netPrivate saving, grossBorrowing from the rest of the world 
 
  
 
 
Graph A5.2: International investment position 

Source: ECB. 

Structure of the capital markets and 
size of the financial sector 

Sweden’s  capital  markets  rank  thirteenth  in 
the  world,  and  are  more  liquid,  mature  and 
deeper than elsewhere in the EU. The Swedish 
stock  market  is  currently  the  third  largest  EU 
market by capitalisation (equivalent to 179.5% of 
GDP vs an EU average of 69.3% of GDP as of Q3-
2024)  and  the  largest  by  number  of  listed 
companies,  with  just  over  1 000  companies  at 
year-end  2023.  The  domestic  bond  market  is 
dominated  by  the  debt  of  financial  institutions, 
notably  through  the  issuance  of  covered  bonds, 
but also of other non-covered bonds. The ratio of 
debt  securities  issued  by  financial  institutions  to 
GDP is  four  to  five  times more  than those issued 
by the government, and almost three times the EU 
average  (66%  of  GDP),  while  bonds  issued  by 
NFCs equate to 29% of GDP, which is the largest 
corporate  segment  in  the  EU.  The  number  of 
issuers  has  increased  manifold  over  the  last 
decade  and,  in  parallel,  the  average  size  of  both 
issues  and  issuers  has  decreased  substantially. 
Bond  financing  is  now  commonplace  and  an 
integral  part  of  Swedish  companies’  financing 
strategies.  Several  factors  are  at  interplay  to 
enable  this  combination  of  market  depth  and 
profitability,  resulting  in  a  well-functioning  and 
robust ecosystem. 

Sweden  stands  out  as  the  only  EU  Member 
State  where  capital  markets  are  more  than 
twice as deep today than they were a decade 
ago. This growth over the last ten years is nearly 
five times the average growth rate in the EU  and 
has  been  driven  by  a  large  increase  in  venture 

capital  (VC)  and  private  equity  (PE)  activity.  The 
buyout market is especially large compared to that 
of other countries and the size of its economy; this 
market  includes  some  of  the  largest  and  most 
specialised PE firms in the EU. The development of 
capital  markets  has  also  been  helped  by  strong 
equity  markets.  Sweden’s  market  in  initial  public 
offerings  (IPOs)  has  been  particularly  dynamic 
enabling  smaller  companies  to  list.  The  Swedish 
equity  market  is  characterised  by  active  trading, 
also 
in  shares  of  small  and  medium-sized 
enterprises (SMEs), and by broad access for many 
investor types.      

Graph A5.3: Capital markets and financial 
intermediaries 

Source: ECB, EIOPA, AMECO. 

in  Q3-2024  which 

Non-bank financial intermediation is growing 
and  managing  assets  to  an  amount  almost 
as  large  as  that  of  the  entire  Swedish 
banking  sector.  Banks  dominate  the  financial 
system, yet their relative share is declining as the 
non-bank  financial  sector  –  including  pension 
funds, mutual funds and insurance companies – is 
growing.  After  peaking  at  313%  of  GDP  in  2020, 
the size of the banking sector declined to 290% of 
GDP 
remains  however 
significantly above the EU average of 248.4% and 
places  the  Swedish  banking  sector  among  the 
biggest  in  size  in  the  EU.  Foreign  presence  is 
limited  and  accounts  for  about  7%  in  terms  of 
assets.  Banking  concentration  appears  to  be 
somewhat higher than on average in the EU, with 
the  top  five  MFIs  representing  about  75%  the 
sector  as  of  end-2023.  i.e.  the  three  major 
Swedish banks -Svenska Handelsbanken, SEB, and 
Swedbank-,  as  well  as  the  two  systemically 
important  branches  –  Nordea  and  Danske  Bank’s 
Swedish  branches  and  mortgage  companies. 
Interbank  exposures  across  the  five largest  banks 

37 

-400-300-200-100010020030040020172018201920202021202220232024-Q3% of GDPForeign Direct Investment, AssetsPortfolio Investment, AssetsOther investment, AssetsOfficial reserve assetsForeign Direct Investment, LiabilitiesPortfolio Investment, LiabilitiesOther investment, LiabilitiesNIIPNon-financial corporationsFinancial corporationsNon-financial corporationsMFIsInsurance  and pension fundsOther financialsGovernmentMFIsPension fundsInsurance corporations​050100150200250300350     Shares                           Bonds                        Assets by sector% of GDP 
  
   
in  Sweden  are  small  thus  posing  limited  direct 
contagion  effects.  Contagion  across  banks  and 
other  financial  institutions  due  to  similarities  in 
portfolio  holdings  appear  more  prominent  yet  not 
easily  quantifiable  due  to  data  constraints.  The 
insurance sector is relatively large with an assets-
to-GDP  ratio  of  around  74%  compared  to  an  EU 
average  of  around  54.8%  (Table  A5.1).  According 
to  data  from  Riksank,  total  assets  of  the  pension 
funds  sector  equate  to  roughly  100%  of  Swedish 
GDP,  and  the  Swedish  investment  fund  sector 
would  come  close  to  that  as  it  has  almost 
quadrupled in size since 2012. 

Resilience of the banking sector 

Sweden’s  banking  sector  remains  resilient, 
with most performance indicators among the 
best  across  the  EU.  The  sector’s  resilience  is 
bolstered  by  strong  capitalisation  and  asset-
quality  metrics,  with  a  capital  adequacy  ratio  of 
22.6%  in  Q3-2024,  above  the  EU  average  of 
20.1%  (see  Table  A5.1).  This  ratio  comes  with  a 
good  level  of  high-quality  loss-absorption  capital, 
as the CET1 ratio amounted to 19.3% in Q3-2024, 
well  above  the  EU  average  of  16.6%.  The 
relatively  high  capital  adequacy  ratios  are  partly 
explained  by  the  use  of  internal  ratings-based 
models, which do not always properly reflect credit 
risk and therefore warrant close monitoring by the 
authorities  as  bank  own  funds  are  relatively  low. 
The  liquidity  coverage  ratio  amounted  to  158.6% 
in Q3-2024, according to the EBA Risk Dashboard, 
which is just below the EU average, but exceeding 
the regulatory minima.  

an 

high 

In  recent  years,  profitability  has  been 
historical 
from 
relatively 
perspective.  The  return  on  equity  (ROE)  reached 
12.9%  at  the  end  of  Q3-2024  (EU  average  of 
10%).  This  has  primarily  been  due  to  rising  net-
interest  income.  The  beneficial  conditions  for  the 
major  banks  are  also  reflected 
improved 
valuations  of  their  shares.  The  non-performing 
loans ratio is among the lowest in the EU (1%) but 
hides  disparities:  in  contrast  to  the  major  banks, 
consumer 
experienced 
banks 
increasing  loan  losses  in  recent  years,  which  has 
contributed  to  their  relatively  low  profitability. 
Although  the  increase  has  moderated  somewhat, 
the level of loan losses is still higher than that of 
the  major  banks  partly  because  the  majority  of 

credit 

have 

in 

their lending is unsecured and partly because they 
target a different customer segment.  

in 

increases 

The  Swedish  banks  have  a  high  dependence 
on  market  funding.  With  178.5%  at  the  end  of 
Q3-2024,  the  loan-to-deposit  ratio  remained  the 
second  highest  in  the  EU  -after  Denmark-  and 
indicates  the  dependence  of  market  funding.  As 
banks take the covered bonds as collateral for the 
loans,  the  share  of  covered  bonds  in  banks’ 
portfolios  of  liquid  assets  is  rising.  Non-banks, 
such  as  pension  funds  and  insurance  companies 
have  thus  become  increasingly  important  funders 
of 
the 
banks,  which 
Swedish 
interconnectedness 
financial  system. 
Moreover,  if  non-banks  own  a  large  share  of  the 
covered  bonds,  there  is  also  a  risk  that  market 
funding  will  become  more  volatile  as  shocks may 
be  amplified.  Deposits  are  also  an  important 
source of funding for Swedish banks, however less 
so  for  major  banks  than  for  consumer  credit 
banks. Since mid-2022, deposits from households 
and  non-financial  corporations  have  gone  down 
slightly,  a  trend  that  will  probably  continue.  This 
means  that  the  share  of  market  financing  –such 
as  certificates,  covered  bonds,  and  unsecured 
bonds–  may  further  increase,  which  could  put 
pressure  on  banks’  profitability  since  market 
funding typically is more expensive than deposits.  

the 

to 

and 

real 

interest 

commercial 

Loan 
losses  are  small  and,  although 
subsiding,  systemic  financial  risks  remain 
elevated.  Banks  have  large  exposures  to  both 
households 
estate 
companies,  which  remain  highly  leveraged  and 
pose  a  risk.  This  risk  is  further  amplified  by  the 
high  sensitivity 
rate  shocks  of 
households  and  corporates  owing  to  their  high 
indebtedness. With over half of the corporate loan 
book,  the  largest  share  of  the  major  banks’ 
exposures is to the commercial real estate sector, 
which  since  2022  has  faced  challenges  linked  to 
their  financing  situation  and  ability  to  pay  higher 
interest costs. To date, the commercial real estate 
sector  only 
represents  3%  of  commercial 
bankruptcies, but the sector is still facing uncertain 
conditions,  although  the  financial  conditions  have 
is  particularly 
become  more  favourable.  This 
evident  in  the  corporate  bond  market,  where 
commercial real estate companies have accounted 
for  half  of  the  total  issuances.  The  Swedish 
banking  sector  is  also  vulnerable  to  risks  coming 
from  the  high  levels  of  household  debt  and  the 
overvaluation  of  real  estate.  In  Sweden,  house 
prices  are  closely  linked  to  bank  funding.  This  is 

38 

 
because  banks  finance  some  of  their  mortgages 
by  issuing  covered  bonds  backed  by  mortgages. 
Long-term  covered  bonds  provide  a  substantial 
part of the financing structure of the banks, and so 
the  rise  in  interest  rates  is  also  transmitted  into 
the interest rates on long-term housing loans. This 
increases  the  loan  servicing  costs  of  households. 
Given  low  coverage  ratios  (18%  at  the  end  of 
2023,  vs.  42.1%  for  the  EU  on  average)  banks’ 
loss  absorption  could  be  challenging  if  a  scenario 
of widespread defaults materialises.  

real  estate 

this  backdrop,  macroprudential 
Against 
policies  adopted  by  the  Swedish  financial 
supervisor  are  appropriate  and  should 
remain in place until risks materially subside. 
the  Minimum  Requirement  for  own  funds  and 
Eligible  Liabilities  (MREL)  has  been  phased  in  by 
Swedish  banks  by  1  January  2024.  Risk  weight 
floors  have  been  set  at  25%  for  mortgage 
exposures  and  corporate  exposures  secured  by 
residential 
(RRE)  and  35%  for 
commercial  real  estate  (CRE).  The  measure  is 
effective from 30 September 2023 and has been 
extended  to  2027.  Moreover,  systemic  risk  has 
been  addressed  by  increasing  the  countercyclical 
capital buffer to 1% effective from 29 September 
2022,  and  to  2%  effective  from  22  June  2023 
Overall,  these  macroprudential  measures  are 
appropriate  and  strengthen  the  resilience  of  the 
financial  system  as  a  whole.  Other  measures 
aimed at counteracting financial imbalances, such 
as 
that  more 
directly  affect  households’  ability  to  borrow,  have 
also proven to be effective. 

the  borrower-based-measures 

Resilience of the non-bank financial 
intermediaries 

insurance 

companies 

Swedish 
are 
interconnected  with  banks  and  particularly 
sensitive  to  equity  price  falls.  Swedish 
insurance companies mainly invest in Swedish and 
foreign  equities,  but  also  investment  funds,  debt 
securities  and  real  property.  The  debt  securities 
purchased  by  insurance  companies  are  mainly 
bonds  issued  by  foreign  borrowers,  but  also 
Swedish  government  bonds  and  bonds  issued  by 
Swedish  banks  and  mortgage  institutions.  Foreign 
investments are hedged to a large extent in order 
to  manage  the  exchange  rate  risk.  Insurance 
companies  are  mainly  exposed  to  the  United 

life 

(59).  The  proportion  of 

States 
insurance 
companies' portfolios invested in risky assets, such 
as  equities  and  funds,  is  high  compared  to 
European  equivalents,  representing  58%  of  total 
investment  assets.  Non-life  insurance  companies 
typically  invest  in  assets  of  shorter  duration  than 
the  life  insurance  companies’  investments.  The 
reason  is  that  non-life  insurance  companies  need 
to manage ongoing claims payments every year. 

Solvency  in  the  non-bank  financial  sector  is 
stable,  but  risks  arise  from  high  complexity 
and  interconnectedness  with  the  investment 
fund  sector,  which  has  a  structural  liquidity 
mismatch. 
Insurance  companies  and  pension 
funds currently own more than half of the shares 
in investment funds, and this also represents more 
than half of their own assets. The increased share 
of  investment  funds  among  the  insurance  and 
pension sector’s assets is a result of the transition 
from  traditional  insurance  policies  to  the  unit-
linked  and  custodial  insurance  policies  that  these 
companies offer their customers(60), corresponding 
to just over 40% of their total assets – one of the 
highest  shares  in  the  EU.  The  Riksbank  has 
repeatedly  highlighted  the  problem  of  rapid 
redemptions  from  funds  that  invest  in  less  liquid 
assets,  particularly  corporate  bond  funds.  This 
creates  a  significant  liquidity  mismatch  between 
the fund’s assets and liabilities, a mismatch that is 
also  larger  than  that  of  other  financial  agents. 
These  funds  then  become  vulnerable  to  sudden 
and large redemptions from their unit holders. In a 
stressed situation, there is therefore a risk that the 
funds will amplify already high selling pressure in 
the  markets  for  the  funds’  assets,  such  as  the 
corporate  bond  market.  Work 
is  ongoing  to 
transpose  EU  directives  to  manage  liquidity  risks 
at investment funds. 

(59)  Riksbank, 2022. 

(60)  Whereas  in  traditional  insurance,  the  life  insurance  or 
occupational pension company chooses how to manage the 
capital  and  bears  the  financial  risk,  with  unit-linked  and 
custodial insurance, customers can choose the funds or other 
securities  in  which  to  invest  their  savings  from  a  selection 
made by the company. 

39 

 
 
Sources of business funding and the 
role of banks 

Firms in Sweden rely heavily on funding from 
capital markets. More specifically, at the end of 
2023, listed shares and bonds represented 33% of 
all  funding  sources  for  Swedish  non-financial 
corporations  (NFCs),  vs  an  EU  average  of  23.8%, 
while bank finance through loans constituted 23% 
of  funding  sources,  less  than  the  EU  average  of 
27.2%.  Over  2020-2023,  the  three-year  average 
of NFC bond and equity issuance as a percentage 
of  total  NFC  financing  was  the  second  highest  in 
the EU after Malta (61) (AFME, 2023). Nevertheless, 
when loans to NFCs are expressed as a percentage 
of GDP, banks in Sweden are a stronger lender to 
NFCs as compared to the EA average, at 48.1% of 
GDP  for  Sweden  vs  34%  for  the  EA.  The  overall 
levels of NFC funding are also substantially higher 
when  expressed  as  a  percentage  of  GDP,  with 
401% for Sweden and 230.3% for the EU average 
(see Graph A5.4). 

Graph A5.4: Composition of NFC funding as % of 
GDP 

The sum of NFC liabilities only reflects the total for the NFC 
liabilities considered. Reference period 2023. 
Source: Eurostat and FISMA E2 calculations. 

Swedish businesses depend more on internal 
or intra-group financing than their European 
peers.  According  to  the  2024  EIB  Investment 
Survey,  only  15%  of  Swedish  firms’  investment 
needs  are  covered  by  external  funding,  compared 
to  an  EU  average  of  25%.  Sweden  exhibits  the 
lowest reliance on external finance for investment: 
only 26% of all firms use it, vs an EU average of 
42%.  At  the  same  time,  only  75%  of  Swedish 

firms believed that their investment activities over 
the last three years were about the right amount, 
less  than  the  EU  average  (80%),  while  21% 
believed  that  they  were  too  little  (vs  an  EU 
average of 14%). 

As  interest  rates  gradually  fall,  timid  signs 
of  recovery  in  credit  demand  and  credit 
growth  are  appearing.  Credit  growth  for  NFCs 
has been very volatile and was negative from June 
2024  on.  However,  as  policy  rates  gradually 
decline, there are some signs of a recovery, which 
is  expected  to  continue  in  2025.  For  households, 
the  annual  credit  growth  rate  for  adjusted  loans 
went  into  negative  territory,  practically  for  all  of 
2023.  Household  lending,  largely  consisting  of 
housing  loans,  constitutes  the  main  part  of  the 
loan  book  of  Swedish  banks  and  is  almost  twice 
the  EU  average.  Loans  to  households  as  a 
percentage  of  GDP  were  78.2%  at  the  beginning 
of  2024  (February)  (vs  44.2%  for  the  EA  on 
average).  Three  quarters  of 
financial 
institutions’  lending  portfolio  is  linked  to  the  real 
estate market through mortgages and commercial 
real estate companies. 

the 

Capital markets and the participation 
of retail investors 

Sweden leads the rest of the EU in terms of 
SME equity financing. In the 2023 SAFE survey, 
45%  of  SMEs  indicated  that  they  used  equity, 
compared to an EU average of 10.1% (62). Sweden 
has  a  high  number  of  publicly 
listed  small 
companies,  second  only  to  Finland  in  terms  of 
capital  raised  as  a  percentage  of  GDP.  According 
to reports of the European Securities and Markets 
Authority,  Sweden  alone  accounts  for  more  than 
40%  of  EU  SME  trading  volumes  with  UK  pre-
Brexit trading volumes included. Supporting factors 
that  facilitate  the  listing  process  include  a  strong 
start-up  ecosystem,  supportive  regulation  and 
retail-investor 
also 
participation. 
consistently  ranks  first  in  the  EU  for  number  of 
IPOs. 

Sweden 

Sweden’s  households’  savings  are  invested 
mainly  in  insurance  and  pension  funds.  The 

(61)  AFME CMU Key Performance Indicators, November 2023 

Results by country, T27. 

(62)  Data  and  surveys  -  SAFE  -  European  Commission,  2023, 

40 

050100150200250300350400450SEEU% of GDPLoansTrade credit and advancesBondsListed sharesUnlisted sharesOther equity 
  
 
 
saving  rate  of  Swedish  households  was  around 
17% in 2023, which is one of the highest rates in 
the EU. Swedish households’ financial assets were 
equivalent  to  322%  of  GDP  in  2023,  higher  than 
the  EU  average  of  209%  of  GDP.  The  largest 
component  of  these  assets  consists  of  collective 
savings,  namely  premium  and  occupational 
pensions, which households cannot take hold of in 
the  short  term.  Insurance  savings  in  Sweden  are 
international  perspective. 
also  high  from  an 
Together,  they  account  for  38.3%  (vs  an  EU 
average  of  27.8%).  Another  significant  share 
(17%) consists of ‘other equity’, covering all forms 
of  equity  other  than  listed  and  unlisted  shares 
(Graph  A5.5).  In  addition  to  indirect  ownership 
through funds, households own just over one tenth 
of the outstanding volume in listed equities. At the 
same  time,  foreign  investors  own  almost  40%  of 
Swedish listed equities. 

Graph A5.5: Composition of household financial 
assets per capita and as % of GDP 

The sum of household assets only reflects the total for the 
household assets considered. Reference period 2023. 
Source: Eurostat and FISMA E2 calculations. 

Measures  to  scale  up  retail 
investment 
combined  with  more  structural  reforms  of 
pensions  and 
retirement  savings  have 
mutually nurtured one another.  Within the EU, 
the  highest  levels  of  retail  financial  assets  are 
held in Denmark (198% of GDP), Sweden (179%), 
and  the  Netherlands  (173%) (63).  Sweden’s  high 
level  of  household  participation  in  equity  markets 
can  be  attributed  not  only  to  its  mature  capital 
market,  but  also  to  its  distinctive  investment 
culture,  fostered  by  forward-thinking  policies, 

(63)  AFME  CMU  Key  Performance 

Indicators,  7th  Edition, 

November 2024 

41 

its  pension  system.  The 
a  mandatory 
scheme, 

including 
’premium 
defined 
pension’ 
contribution system, plays a significant role in this 
regard, allowing pension holders to invest 2.5% of 
their  pensionable  income  in  a  mandatory  savings 
account,  administered  by  the  Swedish  Pensions 
Agency, on an annual basis. Furthermore, a saving 
and  investment  account  with  favoured  tax  status 
was introduced in 2012. Holders of these accounts 
do  not  have  to  report  their  holdings  in  these 
accounts  or  pay  tax  on  capital  gains  made  from 
investments held in these accounts. Instead, these 
accounts  are  taxed  annually  at  an  imputed  rate 
corresponding  to  the  government  borrowing  rate 
plus  1%.  These  policies  have  contributed  to  a 
unique  culture  of  high  financial  literacy  and  stock 
market  engagement,  as  well  as  to  the  vast 
domestic equity holdings of Sweden’s four largest 
pension  funds,  which  provide  confidence 
to 
businesses considering whether to list. 

The role of domestic institutional 
investors 

in 

Insurance companies and pension funds have 
large  equity  portfolios  geared  towards  debt 
securities and real estate. Insurance companies 
and pension funds now own more than half of the 
shares 
this  also 
investment  funds,  and 
represents more than half of their own assets (vs 
EU average of 27%). Debt securities purchased by 
insurance  companies  are  mainly  bonds  issued  by 
foreign  borrowers,  but  also  government  bonds 
(mostly  domestic)  and  bonds  issued  by  Swedish 
banks  and  mortgage 
institutions.  They  also 
increasingly invest in corporate bonds (on average 
around  12%  of  their  assets).  Swedish  banks 
depend on domestic non-bank financial institutions 
for their mortgage funding via covered bonds, held 
in diversified portfolios by foreign parties, Swedish 
investment  funds  and  insurance  companies  and 
pension  funds.  The  share  of  the  amount  of 
covered  bonds  relative  to  bank  loans  reached  
32% in Sweden in […], only exceeded by Denmark 
with a ratio of 85% (vs EU average of 18%). 

The  participation  of  domestic  institutional 
investors  in  providing  funding  for  start-ups 
and VC investors is the highest in the EU. On 
average,  pension  funds  in  Sweden  accounted  for 

0100200300400050100150200SEEUSEEUper capita (000 EUR) (lhs)% of GDP GDP (rhs)Other equityUnlisted sharesListed sharesBondsInvestment fundsInsurance and pension fundsCurrency and depositsHH Debt (liability) 
   
 
Financing the green transition 

social 

The  EU  is  a  global  leader  in  sustainable 
finance,  and  Sweden  leads  the  way  with 
issuance  having 
27.5%  of  total  bond 
environmental, 
governance 
and 
labelling (66). Sweden is a pioneer in green bonds, 
and the market has grown fast. Sweden issued its 
first  sovereign  green  bond 
in  2020.  The 
supranational  Nordic  Investment  Bank  (NIB)  and 
the  Norwegian  state  bank  KBN  Kommunalkredit 
were  among  the  very  first  to  start  issuing  green 
bonds,  both  debuting  in  2010.  Several  important 
green bond firsts have come from the region: the 
first  green  city  bond  (Gothenburg),  the  first 
corporate green bond, the first green bond from a 
real  estate  company  (Vasakronan),  and  the  first 
labelled  green  medium-term  note  corporate  bond 
programme (Fabege). 

Financial literacy 

of 

stock 

ownership. 

The  level  of  financial  literacy  in  Sweden  is 
high.  Organisations  such  as  Aktiespararna  begin 
financial  education  early,  teaching  children  the 
benefits 
The  2023 
Eurobarometer  survey (67)  shows  that  27%  of 
Swedes have a high level of financial literacy, 59% 
a  medium  level,  and  the  remaining  14%  a  low 
level, compared to an EU average of 18% for high 
literacy,  64%  for  medium,  and  18%  for  low.  This 
leads  to  an  overall  financial  literacy  indicator  of 
53.5 vs an EU average score of 45.5. 

30%  of  PE  and  VC  funds  raised  annually  over 
2007-2023,  the  highest  in  the  EU (64).  Data 
provided  by  the  Swedish  Private  Equity  and 
Venture Capital Association indicate that (however 
not  exclusively)  Swedish  pension  funds  and 
insurance  companies  together  provide  39%  of  all 
PE  capital(65).  Sweden  therefore  has  a  lot  of 
institutional  owners  and  active  ownership 
is 
outsourced to PE. 

The depth of venture and growth 
capital 

The  Swedish  private  equity  market  is  the 
largest  and  most  developed  in  the  EU, 
compared to the size of the economy. It is also 
one of the few net exporters of PE flows in Europe. 
According  to  the  capital  markets  union  (CMU) 
dashboard,  PE  investments  in  Sweden  equated  to 
1.2%  of  GDP  on  average  annually  over  2021-
2023  (vs  an  EU  average  of  0.7%),  partly  steered 
by government measures (see Annex Innovation to 
Business).  Sweden  has  the 
lowest  share  of 
domestic investments made by foreign firms (only 
32.4%  of  total  domestic  investment)  but  a  high 
share  of  foreign  investment  made  by  domestic 
firms.  Only  Sweden  and  Denmark  exceed  the  EU 
average  (33%)  for  total  PE  investment  made  by 
domestic firms. 

Sweden  is  a  leading  fintech  hub,  attracting 
significant  VC  investments  and  numerous 
innovative  start-ups.  According  to  the  CMU 
Dashboard, Sweden is among the best performers 
in  the  EU  in  annual  VC  investments  relative  to 
GDP, with 0.14% on average annually over 2021-
2023, (vs an EU average of 0.08% over the same 
period).  Swedish  fintech  firms  mostly  operate  in 
payments,  credit  provision  and  infrastructure,  and 
other  business  models  are  hard  to  label.  Many 
fintech  companies  offer  payment  and  money 
transfer services and are starting to compete with 
banks  in  niche  segments.  The  payments  segment 
is  currently  the  largest  of  the  Swedish  fintech 
segments,  with  a  broad  range  of  both  start-ups 
and mature fintech businesses. 

(64)  Source: Closing the gaping hole in the capital market for EU 

November 2024 

start-ups – the role of pension funds – CEPS. 

(65)  SVCA, 2024. 

(67)  Source:  Monitoring  the  level  of  financial  literacy  in  the  EU  - 

July 2023 - Eurobarometer survey. 

(66)  AFME  CMU  Key  Performance 

Indicators,  7th  Edition, 

42 

 
 
 
 
Table A5.1:  Financial indicators 

Source: ECB, ESTAT, EIOPA, DG FISMA CMU Dashboard, AMECO. 

43 

20172018201920202021202220232024-Q3EUTotal assets of MFIs (% of GDP)292.2274.9280.0312.9278.2294.7293.0290.3248.4Common Equity Tier 1 ratio20.717.017.719.219.218.919.019.316.6Total capital adequacy ratio25.920.721.622.322.222.022.222.620.1Overall NPL ratio (% of all loans)1.31.01.11.01.00.81.01.01.9NPL (% loans to NFC-Non financial corporations)1.80.91.11.00.60.40.50.63.5NPL (% loans to HH-Households)1.21.41.51.41.71.51.82.02.2NPL-Non performing loans coverage ratio26.422.225.829.129.022.820.118.042.1Return on Equity110.912.210.98.410.09.813.112.910.0Loans to NFCs (% of GDP)45.947.947.150.246.947.849.146.630.0Loans to HHs (% of GDP)81.283.684.792.385.779.981.878.544.5NFC credit annual % growth5.76.13.64.07.012.01.8-0.50.8HH credit annual % growth7.05.55.15.66.8-0.5-0.11.10.7Stock market capitalisation (% of GDP)---182.1222.2141.6168.3179.569.3Initial public offerings (% of GDP)2.010.252.081.286.230.100.00-0.05Market funding ratio62.262.263.563.363.361.962.3-49.6Private equity (% of GDP)0.590.670.900.851.361.300.84-0.41Venture capital (% of GDP)0.050.080.070.120.190.160.07-0.05Financial literacy (composite)------53.5-45.5Bonds (as % of HH financial assets)1.41.00.70.60.40.50.5-2.7Listed shares (as % of HH financial assets)7.26.77.48.19.57.88.0-4.8Investment funds (as % of HH financial assets)9.49.09.89.710.29.610.3-10.0Insurance/pension funds (as % of HH financial assets)37.237.537.736.736.437.038.3-27.8Total assets of all insurers (% of GDP)64.963.270.777.782.159.269.773.654.8Pension funds assets (% of GDP)--------23.41-34-1011-1718-2425-27Colours indicate performance ranking among 27 EU Member States.1 Annualized data.Credit growth and pension funds EU data refers to the EA average.Banking sectorNon-banks sector 
 
 
 
  
 
ANNEX 6: EFFECTIVE INSTITUTIONAL FRAMEWORK 

Sweden’s  institutional  framework  influences 
its competitiveness. Trust in public institutions in 
Sweden  is  high.  More  digitalisation  –  creating  a 
public  eID  and  increasing  access  to  electronic 
health  records  –  could  further 
improve  the 
country’s  performance  in  digital  public  services. 
There  is  also  room  to  strengthen  regulatory 
practices.  The  justice  system  performs  efficiently 
overall. 

Public perceptions 

Graph A6.1: Trust in justice, regional / local 
authorities and in government 

(1) EU-27 from 2019; EU-28 before 
Source: Standard Eurobarometer surveys 

pre-Covid 

recovered  after 

institutions,  with 

in  second  place.  Trust 

Sweden  continues  to  enjoy  high  trust  in  its 
institutions.  (Graph  A6.1)  Trust  is  strongest  in 
local  government 
justice 
following 
in  central 
the 
government  has  partly 
decrease in 2022, although it has still not returned 
to 
about 
levels.  When 
improvements that can increase trust in the public 
administration,  50%  of  citizens  pointed  to  more 
transparency in decision-making and use of public 
funds  (EU:  44%)  (68).  The  perceived  quality  of 
government  remains  stable  and  visibly  above  the 
EU  average  (69).  Against  this  backdrop,  Sweden’s 
main  reform  priorities  for  the  past  year  included 

asked 

(68)  Understanding Europeans’ views on reform needs - April 
2023 - - Eurobarometer survey, Country Fact Sheet. 

(69)  Inforegio – European Quality of Government Index 

internal 

security, 

strengthening 
addressing 
potential corruption and unauthorised influence of 
public officials as well as digital security. However, 
progress  on  implementing  the  national  recovery 
and  resilience  plan  remains  slow,  with  the  first 
payment request submitted in December 2024.  

Quality of legislation and regulatory 
simplification 

in  the  EU  average 

Performance  in  developing  and  evaluating 
legislation  is  below  the  EU  average  and  has 
remained  broadly  unchanged  since  2021. 
Practices  in  regulatory  tools  like  ex  ante  impact 
assessment,  ex  post  evaluation  of  legislation  and 
public  consultation  are  broadly  comparable  for 
primary  and  subordinate  regulations.  However, 
performance for stakeholder engagement and ex-
ante  impact  assessments  is  stronger  than  for  ex 
post  evaluation  of  legislation,  though  still  weaker 
than 
(Graph  A6.2).  The 
established  practice  of  ‘white  papers’  and  public 
inquiries  frequently  lead  to  proposals  for  new  or 
revised  laws.  In  2024  the  government  introduced 
new  rules  for  the  preliminary  impact  assessment 
for  draft  laws.  The  aim  is  to  enable  agencies, 
committees  and  chairs  of  inquiries  to  develop 
cost-effective  and  socio-economically 
justified 
proposals. Overall, there is room to strengthen the 
systematic  adoption,  transparency,  oversight  and 
quality control of public consultations and ex post 
evaluations  of 
the 
for  primary  and 
transparency 
secondary regulations’ impact assessments (Graph 
A6.2). 

legislation,  as  well  as 

requirements 

is 

taking 

measures 

for 
Sweden 
administrative  simplification.  A  'simplification 
council',  set  up  in  2024,  will  explore  ways  to 
reduce  administrative  burden  for  small  and 
medium-sized  enterprises  (70).  In  addition,  County 
Administrative  Boards  have  been  tasked  with 
ensuring  more efficient contacts with government 
agencies  (71).  However,  there  is  scope  for  Sweden 

(70)  Regeringen (2024), 

https://www.regeringen.se/pressmeddelanden/2024/04/nytt-
forenklingsrad-ska-minska-foretagens-regelborda   

(71)  Regeringen (2024), 

https://www.regeringen.se/pressmeddelanden/2024/03/uppdr
ag-till-lansstyrelserna-att-forenkla-for-foretag-genom-
battre-myndighetskontakter  

44 

00.10.20.30.40.50.60.70.80.9AutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSummerWinterSummerWinterSpringAutumnSpringAutumn2014201520162017201820192020202220232024Justice,  legal system EU27Justice,  legal system SERegional or local public authorities EU27Regional or local public authorities SEGovernment  EU27Government  SE 
 
      
 
 
 
 
Table A6.1:  Sweden. Selected indicators on administrative burden reduction and simplification 

(1) This table presents a subset of iREG indicators focusing on regulatory costs. The indicators refer to primary legislation. 
Source: OECD (2025), Regulatory Policy Outlook 2025 [https://doi.org/10.1787/56b60e39-en] and Better Regulation across the 
European Union 2025 (forthcoming). 

and 

regulation 

the  mechanisms 

further  strengthen 

for 
to 
simplifying 
identifying 
administrative  burdens.  For  example,  ex  post 
evaluations of primary legislation are not required 
to  contain  an  assessment  of  administrative 
burdens  and  of  substantive  compliance  costs. 
Moreover,  periodic  ex  post  evaluation  of  existing 
regulations is not mandatory (table A6.1). 

Graph A6.2: Indicators of Regulatory Policy and 
Governance (iREG) 

The  OECD  product  market 
regulation 
indicator shows that that Sweden’s licensing 
system is slightly more burdensome than the 
EU average. There is room to further align it with 
best practices. While the government keeps an up-
to-date  inventory  of  all  the  permits  and  licences 
required/issued  to  businesses  by  public  bodies, 
there  is  no  requirement  for  the  government  to 
regularly  review  it  and  assess  whether  such 
licences and permits are still required or should be 
withdrawn.  Moreover,  there  is  no  requirement  for 
public bodies at central level to observe the once-
only principle (see also Annex 4). 

Source: OECD (2025), Regulatory Policy Outlook 2025 and 
Better Regulation across the European Union 2025 
(forthcoming). 

Social Dialogue 

tradition 

long-standing 

of 
Sweden’s 
tripartite bargaining supports a robust social 
dialogue  model.  Currently,  over  650  collective 
agreements  cover  approximately  90%  of  the 
Swedish labour force, among the highest coverage 

45 

0.00.51.01.52.02.53.03.54.0Primary lawsSubordinateregulationsPrimary lawsSubordinateregulationsPrimary lawsSubordinateregulationsSE_StakeholderengagementSE_Regulatory ImpactAssessmentSE_Ex-post evaluation oflegislationMethodologySystematic adoptionTransparencyOversight and quality control2021EU-27Ex ante impact assessment of legislationEx post evaluation of legislationIdentify and assess the impacts of the baseline or ‘do nothing’ option.Is required to consider the consistency of regulations and address areas of duplication.Identify and assess the impacts of alternative non-regulatory options.Is required to contain an assessment of administrative burdens.Quantify administrative burdens of new regulations.Is required to contain an assessment of substantive compliance costs.Quantify substantial costs of compliance of new regulations.Compares the impact of the existing regulation to alternative options.Assess macroeconomic costs of new regulations. Periodic ex post evaluation of existing regulations is mandatory.Assess the level of compliance.Government uses stock-flow linkage rules when introducing new regulations (e.g., one-in one-out).Identify and assess potential enforcement mechanisms.A standing body has published an in-depth review of specific regulatory areas in the last 3 years.In the last 5 years, public stocktakes have invited businesses and citizens to assess the effectiveness, efficiency, and burdens of legislation.When developing new legislation, regulators are required to …Yes /  For all primary laws For major primary laws For some primary lawsNo / Never 
   
 
 
   
 
Table A6.2:  Digital Decade targets monitored by the Digital Economy and Society Index 

Source: State of the Digital Decade report 2024 

ensuring 

negotiations, 

rates in the EU(72) . The state plays a limited role, 
primarily  providing  the  legislative  framework  for 
collective  agreements  and  industrial  actions  and 
facilitating 
the 
independence  of  the  social  partners.  Sweden’s 
social  dialogue  model  is  considered  as  highly 
effective, offering strong labour protection, regular 
state  consultations  with  social  partners,  and  one 
of Europe’s lowest levels of labour conflict, broadly 
supported  by  unions,  employers,  and  the  state. 
Since 2000, the Swedish National Mediation Office 
(SNMO)  has  promoted  efficient  wage  formation, 
mediated  labour  disputes,  and  provided  public 
wage  statistics  to  uphold  this  model.  The  SNMO 
can  appoint  mediators  when  industrial  action  is 
threatened or at the request of negotiating parties, 
as  well  as  special  mediators  in  disputes  over 
wages and employment terms (73). 

Digital public services 

Sweden  performs  well  in  providing  online 
public  services  for  citizens  and  businesses, 
ranking above the EU-27 average (Table A4.2). 
Sweden  also  consistently  ranks  above  the  EU-27 
interaction  with  public 
average 

for  online 

(72)  Swedish Mediation Office, 2023, 

https://www.mi.se/forhandling-avtal/kollektivavtalstackning-
och-organisationsgrad/.  

(73)  For an analysis of the involvement of Sweden’s social 

partners at national level in the European Semester and the 
Recovery and Resilience Facility, see Eurofound (2025), 
National-level social governance of the European Semester 
and the Recovery and Resilience Facility. 

46 

authorities.  However,  online  access  to  electronic 
health  records  lags  behind  the  EU-27  average. 
This gap is forecast to widen further (74).  

In Sweden, eID is delivered by private providers. In 
2023, 
the  government  explored  options  for 
creating  a  public  digital  identity  scheme,  ensuring 
a  high  level  of  trust  and  cost-efficiency  (75).  A 
government committee (76) has suggested that the 
Swedish  Companies  Registration  Office  should 
issue  eID  schemes  for  legal  person  as  mandated 
by  article  3  a  (1)  in  the  regulation  (EU)  No 
910/2014  as  regards  establishing  the  European 
Digital 
Swedish 
Framework. 
Companies  Registration  Office  has  then  been 
given a budget to begin this work in 2025.  

Identity 

The 

Sweden 
is  advancing  towards  seamless, 
automated exchange of authentic documents 
and  data  across  the  EU.  It  has  developed  the 
necessary  infrastructure  and  is  beginning  the 
process  of  connecting  up  the  first  authorities  to 
the Once-Only Technical System (77). 

Sweden  is  continuing  to  explore  ways  of 
using  artificial  intelligence  (AI).  In  December 

(74)  https://digital-strategy.ec.europa.eu/en/factpages/sweden-

2024-digital-decade-country-
report#:~:text=Sweden's%20performance%20towards%20th
e%20Digital,the%20work%20on%20e%2DID.  

(75)  https://www.regeringen.se/rattsliga-dokument/statens-

offentliga-utredningar/2023/10/sou-20236 

(76)  Kompletterande bestämmelser till EU:s reviderade förordning 

om elektronisk identifiering - Regeringen.se 

(77)  European Commission, Once-Only Technical System 

Acceleratormeter 

Digital Decadetarget by 20302022202320242024EU-27Digitalisation of public services185889379100Score (0 to 100)20212022202320232030288889685100Score (0 to 100)202120222023202320303na707879100Score (0 to 100)20212022202320232030SwedenEU-27Digital public services for citizensDigital public services for businessesAccess to e-health records 
 
 
 
 
 
  
 
2023, it set up an AI Commission to  set  priorities 
for  the  use  of  AI,  including  to  enhance  the  public 
administration’s 
The  Commission 
presented its proposals in February 2025 (78). 

efficiency. 

Graph A6.3: Participation rate of 25-64 year olds 
in adult learning (%) by occupation 

Source: European Commission, based on the Labour Force 
Survey 

Civil service  

The  capacity  of  the  civil  service  is  high.  In 
2024,  approximately  half of  public  administration 
employees  participated  in  education  and  training, 
giving Sweden the highest participation rate in the 
EU (Graph A6.3). Since 2023, all new employees of 
the  central  administration  can  participate  in  an 
introductory,  voluntary,  fully  digital  course  that 
covers 
legality, 
topics  such  as  democracy, 
respect  and 
objectivity,  freedom  of  speech, 
efficiency. 

Sweden’s civil service is younger than that of 
the  EU-27  average.  The  share  of  civil  servants 
below  39  has  increased  by  more  than  the  EU 
average over the past four years (79). The share of 
women in senior administrative positions is above 
the EU-27 average (80). 

Integrity 

responsible 

A lower proportion of businesses than the EU 
average consider corruption to be a problem, 
and  anti-corruption  services  cooperate  well. 
In  Sweden,  42%  of  companies  consider  that 
corruption  is  widespread  (EU  average  64%)  and 
only  13%  consider  that  corruption  is  a  problem 
when  doing  business  (EU  average  36%)  (81). 
Moreover,  43%  of  companies  believe  that  people 
and businesses caught for bribing a senior official 
are appropriately punished (EU average 31%)  (82). 
Law  enforcement  agencies 
for 
investigating and prosecuting corruption cooperate 
well,  have  an  appropriate  level  of  resources  and 
continue  to  present  results  (83).  The  authorities 
collaborate well with international  counterparts to 
investigate  and  prosecute 
foreign  bribery. 
However,  as  in  past  years,  the  few  notable  high-
profile  foreign  bribery  cases  did  not  result  in 
convictions,  mostly  due  to  legal  limitations  and 
difficulties  in  gathering  the  necessary  evidence. 
This  has  attracted  criticism  from  the  OECD 
Working Group on Bribery (84). Furthermore, public 
procurement  remains  one  of  the  main  corruption 
risk  areas  in  Sweden  (85).  27%  of  companies  (EU 
average 27%) think that corruption has prevented 
them  from  winning  a  public  tender  or  a  public 
procurement  contract  in  practice  in  the  last  three 
years  (86).  Municipalities  and  regions  and  the 
construction  sector  are  among  the  sectors  at  a 
high-risk  of  corruption  (87).  The  government  has 
initiated  an  anti-corruption  action  plan to  address 
potential  corruption  and  unauthorised  influence 
over public officials (88). 

Whereas  Most  Member 
have 
implemented  a  public  register  for  lobbyists, 

States 

(81)  Flash Eurobarometer 543 on businesses’ attitudes towards 

corruption in the EU (2024).  

(82)  Ibid. 

(83)  See the 2024 country-specific chapter for Sweden of the 

Rule of Law Report, pp. 14-15 

(84)  Ibid., p. 14. 

(85)  Ibid., p. 19. 

(78)  AI-kommissionens Färdplan för Sverige    

corruption in the EU (2024). 

(86)  Flash Eurobarometer 543 on businesses’ attitudes towards 

(79)  Eurostat. Labour Force Survey. Employment by sex, age and 

(87)  See the 2024 country-specific chapter for Sweden of the 

economic activity. 

Rule of Law Report, p. 19. 

(80)  European Institute for Gender Equality, 2024. 

(88)  Ibid., pp. 12-13. 

47 

05101520253035404550SEEU-27SEEU-27SEEU-27SEEU-272021202220232024Public administration and defence; compulsory social securityHigh-skilled occupationsMedium-skilled occupationsUnskilled occupationsArmed forcesTotal economy 
   
 
 
Sweden has not. There still are no rules on how 
to  engage  with  lobbyists  or  on  disclosure  of 
lobbying  contacts.  An  all-party  inquiry  committee 
reviewing rules on transparency in the financing of 
political  parties  has  been  mandated  to  consider 
strengthen 
is  a  need 
whether 
transparency  regarding  contacts  between  political 
decision-makers and lobbyists (89). 

there 

to 

Justice 

to 

The 

time 

needed 

justice  system  performs  efficiently 
The 
overall. 
resolve 
administrative cases at first instance in 2023 was 
comparatively  low  among  Member  States  at  83 
days  (compared  to  107  in  2022).  The  clearance 
rate  is  stable  for  civil  and  commercial  litigious 
cases (at 102% in 2022 and 97% in 2023) and for 
administrative cases (at 103% in 2022, and 105% 
in  2023).  At  the  same  time,  the  estimated  time 
needed to resolve civil, commercial, administrative 
and  other  cases  at  first  instance  fell  from  123 
days in 2022 to 108 days in 2023. The quality of 
the 
level  of 
digitalisation  is  overall  very  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. As regards 
judicial  independence,  no  systemic  deficiencies 
have been reported (90). 

justice  system 

is  good.  The 

(89)  See the 2024 country-specific chapter for Sweden of the 

Rule of Law Report, p. 17. 

(90)  For more detailed analysis of the performance of the justice 
system  in  Sweden,  see  the  upcoming  2025  EU  Justice 
Scoreboard and2024 Rule of Law Report. 

48 

 
 
 
SUSTAINABILITY 
ANNEX 7: CLEAN INDUSTRY AND CLIMATE MITIGATION 

faces 

significant 

Sweden 
challenges 
regarding  its  clean  industry  transition  and 
climate  mitigation:  While  Sweden  is  a  leading 
exporter of net zero technologies, it struggles with 
limited  manufacturing  capacity  for  solar  PV  and 
wind  components,  and  a  dependency  on  non-EU 
countries  for  these  resources.  The  country's 
emission  reduction  efforts  are  hampered  by 
slowed  progress  in  the  decarbonization  of  the 
transport  sector,  exacerbated  by  policy  changes 
that have increased fuel consumption and reduced 
incentives  for  electric  vehicles.  In  the  realm  of 
sustainable  industry,  Sweden's  circular  material 
use  rate  is  below  the  EU  average,  and  there  are 
pressing needs for investment in circular economy 
initiatives 
in  waste 
management.  This  annex  reviews  the  areas  in 
need  of  urgent  attention 
in  Sweden’s  clean 
industry  transition  and  climate  mitigation,  looking 
at different dimensions. 

improvements 

and 

Strategic autonomy and technology 
for the green transition  

Net zero industry  

Sweden  is  a  significant  global  manufacturer 
of  net  zero  technologies(91).  In  the  battery 
sector, manufacturing capacity used to amount to 
between  15.5  and  16  GWh/y  (7%  of  total  EU 
capacity)  for  battery  and  storage  technologies. 
Nevertheless, the Northvolt bankruptcy reveals EU 
challenges in this sector. Moreover, it has at least 
13  factories  that  specialise  in  the  manufacturing 
of  heat  pumps  and  counts  amongst  the  EU’s  top 
export  performer  in  heat  pumps.  Metacon,  a  key 
European producer of electrolysers is also based in 
Sweden.  

Sweden  has  established 
itself  as  a 
competitive  exporter  of  components  across 
various Net-Zero technologies, including grid, 
heat  pump,  geothermal,  wind  turbine,  and 
sustainable  biogas  technologies.  Sweden’s 

exports  in  heat  pump  technologies  were  EUR  1.8 
billion.  In  the  grid  technologies  sector,  Sweden  is 
competitive 
electric 
conductors  and  devices  for  protecting  electrical 
circuits.   

exporting 

insulated 

in 

increasing 

The  country  is  actively  participating  in  EU 
IPCEIs  on  hydrogen  and  batteries  supporting 
the  development  and  deployment  of  clean 
technologies  and 
innovation  and 
competitiveness,  while  contributing  to  a  low-
carbon  and  more  competitive  economy.  However, 
with  a  manufacturing  capacity  ranging  between 
120  and  250  MW/y(92)  (1%  of  EU  capacity)  for 
photovoltaic  (solar  PV)  modules  and  up  to  25 
MW/y (a negligible share of total  EU capacity) for 
wind  power,  Sweden is  dependent  on  non-EU 
countries  for  solar  PV  and  wind  components2.  To 
innovative  solar  PV 
tackle 
manufacturing  projects  have  received  support 
from 
Innovation  Fund.  Sweden’s 
manufacturing  capacity  for  modules  and  cells  of 
solar  PV  is  expected  to  increase  in  the  coming 
years. 

the  EU’s 

challenge, 

this 

Limited  availability  of  skilled  workers  in 
science,  technology  and  engineering  is  a 
bottleneck  for  investment.    While  Sweden 
excels  in  innovation  and  research,  the  limited 
science, 
availability  of 
technology 
affect 
investment  and  slow  down  innovation  in  net  zero 
technologies. However, the country’s upskilling and 
reskilling efforts could help mitigate this issue(93). 

skilled  workers 
engineering 

in 
could 

and 

of 

net 

zero 

The Swedish policy framework supporting the 
scale-up 
technology 
manufacturing  is  well  developed  but  would 
benefit from a more comprehensive approach 
Sweden's  Climate  Action  Plan  (2023)  includes 
around  70  action  points,  such  as  incentives  for 
CCS  and  the  development  of  a  sustainable  and 
competitive  battery  value  chain  in  both  Sweden 
and Europe. The government supports the creation 
of  good  conditions  for  vehicle  manufacturers’  key 
investments/establishments,  through  coordinated 
efforts  by  Business  Sweden 
(2023-2025), 
especially  for  the  development  and  production  of 

(91)  European Commission: Directorate-General for Energy. 2025.  
The net-zero manufacturing industry landscape across the 
Member States 2025,  The net-zero manufacturing industry 
landscape across-MJ0125008ENN..pdf 

(92)  Megawatts per year (MW/y) 

(93)  DG ENER Net zero manufacturing industry landscape across 

member states  

49 

 
 
 
 
 
 
 
batteries in Sweden. However, it does not set any 
specific  manufacturing  capacity  targets,  nor  a 
dedicated, 
permitting 
process or dedicated resilience-related auction and 
procurement criteria.  

streamlined 

industrial 

the 

Sweden offers various incentive instruments, 
including 
leap’  scheme,  which 
provides  grants  for  innovative  biofuels,  batteries, 
and hydrogen electrolyser projects from 2018 until 
2031, to promote a cleaner industry. 

‘industry 

Critical raw materials  

Sweden  has  an  important  role  in  the  EU’s 
supply  of  critical  raw  materials.  Ensuring  the 
supply  of  critical  raw  materials  is  necessary  to 
develop technologies for strategic sectors such as 
renewable energy, digital, aerospace and defence. 

The  ICMM’s  Mining  Contribution  Index  ranks 
Sweden  54th  out  of  183  countries(94).  In  EU 
mining production of metals and minerals, Sweden 
leads in iron, lead and zinc (95). The extent to which 
a  specific  raw  material  is  dominated  by  a  few 
suppliers  or  countries  is  higher  than  in  the  EU  as 
an  average  (0.26  vs  EU  average  0.22).  In  2023, 
the  main  critical  raw  materials  imports  included 
copper 
nickel 
(Australia),  aluminium  (Norway)  and  coking  coal 
(Australia).  

(Brazil,  Norway, 

Australia), 

Action  to  speed  up  permitting  for  extracting 
critical  raw  materials  is  lagging.  Sweden  is 
preparing  legislation  to  speed  up  permits  for 
extracting critical raw materials. 

Climate mitigation 

Industry decarbonisation 

Sweden has a strong manufacturing industry 
with  moderate  levels  of  greenhouse  gas 
emissions  intensity.  At  28%,  Sweden  has  the 

(94)  RMIS - Country Profiles 

(95)  COMEXT 

to 

highest 

relative 

contribution 

fourth 
of 
overall  greenhouse  gas 
manufacturing 
emissions  among  EU  countries (96).  However,  the 
emissions  intensity  of  its  manufacturing  is  the 
fifth lowest in the EU, with 150 g CO2eq per euro 
of  gross  value  added)  –  55%  of  the  EU  average. 
Between  2017  and  2022,  the  greenhouse  gas 
emissions  intensity  of  Swedish  manufacturing 
improved  by  22%,  slightly  more  than  the  EU 
average  of  20%.  With  a  share  of  54%,  Sweden’s 
greenhouse  gas  emissions  from  manufacturing 
are  dominated  by  those  related  to  industrial 
processes  and  product  use;  energy-related 
emissions  account  for  the  remainder.  In  the  EU 
overall, these shares are 43% and 57%. 

In  recent  years,  Sweden  has  seen  major 
improvements in the emissions intensities of 
both  energy  use  –  owing  to  higher  energy 
efficiency  –  and  process  and  product  use  in 
manufacturing.  In  both  areas,  the  emissions 
intensity of manufacturing has decreased by more 
than  a  fifth,  23%  in  energy  use  and  21%  in 
industry  processes  and  product  use (97).  This 
compares  with  significantly  lower  (16%)  and 
slightly  higher  (23%)  improvements  EU-wide  in 
these  two  areas.  At  the  same  time,  the  share  of 
electricity  and  renewables  in  the  final  energy 
consumption  of  manufacturing  remained  broadly 
stable  at  80%,  the  highest  in  the  EU.  In  parallel, 
the  energy  intensity  of  manufacturing  decreased 
to about the same degree as in the EU overall, by 
15%, from 1.8 GWh per euro of GVA to 1.6 GWh/€ 
–  while  still  remaining  60%  higher  than  the  EU 
average of 1.1 GWh/€ in 2022.  

(96)  In  2023.  Manufacturing  includes  all  divisions  of  the  “C” 
section  of  the  NACE  Rev.  2  statistical  classification  of 
economic  activities.  In  the  remainder  of  this  section,  unless 
indicated  otherwise,  data  on  manufacturing  refer  to  the 
divisions  of  the  NACE  section  C  excluding  division  C19 
(manufacture  of  coke  and  refined  petroleum  products),  and 
the  year  2022.  The  source  of  all  data  in  this  section  is 
Eurostat;  data  following  the  UNFCCC  Common  Reporting 
Framework (CRF) are from the European Environment Agency 
(EEA), republished by Eurostat. 

(97)  For the GHG emissions intensity of GVA related to energy use 
and  industrial  processes  and  product  use  respectively,  GHG 
emissions  are  from  inventory  data  in  line  with  the  UNFCCC 
Common  Reporting  Format  (CRF),  notably  referring  to  the 
source sectors CRF1.A.2 –  fuel combustion in manufacturing 
industries  and  construction  and  CRF2  –  industrial  processes 
and  product  use.  The  CRF1.A.2  data  broadly  correspond  to 
the NACE C and E sectors, excluding C-19. GVA data (in the 
denominator  for  both  intensities)  are  aligned  with  this 
sectoral  coverage.  Therefore,  they  are  not  fully  consistent 
with the data referred to in other part of this section. 

50 

 
 
 
 
Graph A7.1: GHG emission intensity of manu-
facturing and energy-intensive sectors, 2022 

the  development  of  lead  markets  for  climate-
friendly products. 

Graph A7.2: Manufacturing industry production: 
total and selected sectors, index (2021 = 100), 
2017-2023 

Source: Eurostat. 

Production 
in  Sweden’s  energy-intensive 
industries  is  relatively  efficient  in  terms  of 
greenhouse  gas  emissions.  Energy-intensive 
industries (98)  account  for  12%  of  Sweden’s  total 
manufacturing  gross  value  added  (2022).  Of 
these, economically, the manufacture of paper and 
paper products and basic metals provide for 6 and 
4  percentage  points  respectively.  Greenhouse  gas 
emission  intensity  in  these  sectors  in  Sweden  are 
below  than  the  EU  average.  Unlike  for  electricity, 
Sweden has seen larger increases in the gas price 
in  recent  years  (99).  Production  in  its  energy-
intensive sectors has declined too, by up to almost 
25%  for  non-metallic  mineral  products  and  15% 
for the basic metals sector. 

Sweden  has  put  in  place  policies  to  support 
the  decarbonisation  of  industry.  For  example, 
funding  for  research  and  development  is  being 
provided  through  the  “FONA  –  research  for 
sustainability”  initiative.  In  addition,  Sweden  has 
subsidies  for  clean  technologies,  e.g.  through 
‘carbon contracts for difference’ and tax incentives 
for 
it 
supports  the  expansion  of  electrolyser  capacity  in 
line  with  the  national  hydrogen  strategy  and 
promotes  both  energy  efficiency  in  industry  and 

investment.  Furthermore, 

low-carbon 

(98)  Notably,  the  manufacture  of  paper  and  paper  products 
(NACE  division  C17),  of  chemicals  and  chemical  products 
(C20),  “other”  non-metallic  mineral  products  (C23;  this 
division includes manufacturing activities related to a single 
substance of mineral origin, such as glass, ceramic products, 
tiles,  and  cement  and  plaster),  and  basic  metals  (C24).  To 
date,  these  industries  are  energy-intensive  –  i.e.  consuming 
much  energy  both  on  site  and/or  in  the  form  of  purchased 
electricity  –  and  greenhouse  gas  emissions  intensive,  in 
various combinations. 

(99)  For a detailed analysis of energy prices, see Annex 8 on the 

affordable energy transition. 

51 

Source: Eurostat (series sts_inpr_a) 

Reduction of emissions in the effort 
sharing sectors 

To  attain  its  2030  effort  sharing  target, 
Sweden  needs 
to  swiftly  specify  and 
implement  its  foreseen  climate  mitigation 
policies  (100).  In  2023,  GHG  emissions  from 
Sweden’s  effort  sharing  sectors  are  expected  to 
have  been  37.8%  below 
those  of  2005, 
significantly higher than its effort sharing target, a 
reduction  of  50%.  By  2030,  current  policies  are 
projected to reduce them by 40.8% (101). Additional 
policies  considered  by  Sweden  are  projected  to 
imply reductions by a further 3 percentage points. 
This  results  in  a  shortfall  regarding  the  effort 

(100)The national greenhouse gas emission reduction target is 
set  out  in  Regulation  (EU)  2023/857  (the  Effort  Sharing 
Regulation).  It  applies  jointly  to  buildings  (heating  and 
cooling);  road  transport,  agriculture;  waste;  and  small 
industry (known as the effort sharing sectors). 

(101) The  effort  sharing  emissions  for  2023  are  based  on 
inventory  data.  The  final  data  will  be 
approximated 
review. 
established 
Projections  on 
(“with  existing 
measures”,  WEM)  and  additional  (“with  additional  policies”, 
WAM)  policies  based  on  reported  projections  by  Sweden 
under Art. 18 of Regulation (EU) 2018/1999 (the Governance 
Regulation) in 2024.  

in  2027  after  a  comprehensive 
impact  of  current 

the 

00.511.522.533.54C-C19C17C20C23C24KG CO2eq / €SwedenEU-277075808590951001051101152017201820192020202120222023ManufacturingManufacture of paper and paper productsManufacture of other non-metallic mineral productsManufacture of basic metals 
  
 
      
 
sharing  target,  -50  %,  by  6.2  percentage  points. 
While  Sweden  could  however  reach  its  effort 
sharing  target  by  using  domestic  flexibilities 
available  under  the  Effort  Sharing  Regulation, 
swift  and  steady  adoption  and  implementation  of 
climate mitigation measures will be important.  

lowering 

Recent  policy  changes  have 
led  to  an 
increase  in  emissions  from  road  transport, 
which is a key contributor within the effort sharing 
sectors.  Sweden  significantly  reduced  its  fuel 
blending  obligations, 
the  share  of 
biofuels  in  diesel  and  petrol.  Combined  with  tax 
cuts  on  liquid  fuels,  this  has  led  to  higher  fuel 
consumption. At the same time, the phasing out of 
purchase 
incentives  for  electric  vehicles  has 
contributed to a stagnation in electric vehicle sales 
in  2024.  These  measures  have  weakened  the 
decarbonisation  trend  in  the  transport  sector, 
putting  pressure  on  Sweden’s  path  to  meeting  its 
2030 target. 

Circular economy transition 

has 

resource 

productivity 

Despite  positive  trends,  there  is  room  for 
boosting  Sweden’s  circularity  transition.  In 
2023,  the  circular  use  of  material  was  9.9%, 
against  the  EU  average  of  11.8%.  The  rate  had 
been  increasing  quickly  since  2019,  reaching 
12.1%  in  2022,  but  decreased  again  in  2023. 
Sweden’s 
been 
constantly improving since 2019 and reached EUR 
2.18  generated  per  kg  of  material  consumed  in 
2023,  which  is  slightly  below  the  EU  average  of 
EUR  2.22  per  kg.  In  2020,  Sweden  adopted  its 
Circular  Economy  Strategy (102),  followed  by  an 
action  plan  in  2021 (103).  The  action  plan  includes 
measures  along  the  entire  lifecycle  of  products 
and  identifies  a  set  of  priority  sectors,  including 
renewable  and  bio-based 
plastics, 
materials,  food,  the  construction  and  property 
sector  (including  building  and  demolition  waste) 
and  innovation-critical  materials  and  minerals.  An 
action plan for plastics (104) was adopted in 2022, 
and  some  non-legislative  measures  have  been 
introduced on food waste and textiles. The 2021-
2030  national  strategy  for  sustainable  regional 
country (105) 
development 

throughout 

textiles, 

the 

emphasises  the  importance  of  a  transition  to  a 
competitive, circular and sustainable economy. The 
strategy  allows  for  regional  funding  for  business 
development  through,  among  other  things,  the 
transition to a circular economy. 

response 

in 
the  new 

Sweden’s  municipal  waste 
generation 
remained  broadly  stable  in  2010-2019.  The 
reported  amounts  in  2020  and  2021  were  lower 
but this is likely due to a comprehensive change in 
the 
reporting  methodology 
implementation  of 
rules 
introduced  in  the  Waste  Framework  Directive  in 
2018.  And  further  adjustments  are  expected, 
especially  as  regards  the  generation  of  municipal  
waste  from  other  sources  than  households.  In 
2022,  the  country  generated  395  kg/cap  of 
municipal  waste,  which  is  significantly  below  the 
estimated EU average of 513 kg/cap.  

reporting 

to 

The  recycling  rate  of  40%  is  below  the 
estimated  EU  average  of  49%.  The  recycling 
rate  has  been  rather  stable  since  2010,  with  a 
large  drop  in  2020, mainly  caused  by  the  change 
to  reporting  (new  calculation  rules).  Sweden  is  at 
risk  of  missing  the  55%  target  for  preparing 
municipal waste for re-use and recycling by 2025.  

Incineration  is  the  major  type  of  waste 
treatment,  accounting  for  59%  of  all  waste 
treated,  while  landfilling  accounts  for  less 
than  1%.  The  low  rates  of  preparing  for  reuse 
and recycling are mainly due to low capture rates 
for  recyclables,  and  waste  incineration  continues 
to be the predominant waste treatment path (106). 

in 

the 

investment 

Current 
circularity 
transition  has  been  insufficient.  Sweden  is 
estimated  to  need  total  additional  investment 
worth  at  least  EUR  902  million  per  year  for  the 
circular  economy 
including  waste 
transition, 
management.  Of  the  circular  economy  gap,  EUR 
217  million  relates  to  recent  initiatives,  such  as 
eco-design  for  sustainable  products,  packaging 
and  packaging  waste,  labelling  and  digital  tools, 
critical  raw  materials  recycling  and  measures 
proposed  under  the  amended  Waste  Framework 

(102) Swedish Ministry for Environment, 2020, Link. 

(103) Swedish Ministry of Climate and Business, 2021, Link. 

(104) Swedish Ministry of Climate and Business, 2022, Link. 

(106) European Commission, 2023, The early warning report for 

(105) Swedish Ministry of Climate and Business, 2020, Link. 

Sweden, Link. 

52 

 
 
 
Agency (111) attribute 4 500 years of life lost (YLL) 
to  fine  particulate  matter  (PM2.5) (112)  and  7 000 
YLL  to  ozone (113).  The  costs  from  all  pollutants 
were  estimated  at  EUR  6.3  billion 
in  2021 
following the value of statistical life methodology 
(114). To meet its objectives for pollution prevention 
and control  and address the health and economic 
costs  of  pollution,  Sweden  needs  an  additional 
equivalent  to  EUR 1 billion  per  year  (around  0.2% 
of GDP), mostly related to clean air and noise (115). 

Directive.  EUR  613  million  constitutes  other 
needs (107).   

Zero pollution industry 

reported 

Air  quality  in  Sweden  is  generally  good.  The 
emissions of several air pollutants have decreased 
significantly  since  2005,  while  GDP  growth  has 
continued. However, Sweden has not made enough 
progress on reducing emissions under the National 
Air  Pollution  Control  Programme  (NAPCP).  The 
latest 
continued 
data 
non-compliance  with  the  2020-2029  emissions 
reduction  commitment  for  NH3  and  also  projects 
non-compliance  with  the  emissions  reduction 
commitments  for  NOx  and  NH3  that  will  start  in 
2030. In 2023, exceedances above the limit values 
set  by  the  Ambient  Air  Quality  (AAQ)  Directive 
were  registered  for  carbon  monoxide  (CO)  in  one 
air  quality  zone (108)  and  for  PM10  in  two  air 
quality zones (109) in Sweden (110). 

show 

Sweden’s  industry  still  releases  air  and 
water  pollutants.  The  country  has  the  16th 
highest  damage  in  the  EU,  but  it  only  ranks  24th 
for  emissions  intensity,  below  the  EU  average  of 
EUR 27.5 of damage per 1 000 EUR of gross value 
added  (GVA).  The  main  contributors  to  emissions 
to air are the energy sector as well as the pulp and 
paper  industry  for  NOX  emissions;  the  waste 
management  and  the  pulp  and  paper  as  well  as 
iron  industry  for  dust  emissions,  and  the  energy 
sector,  metals  sector  and  mineral  sector  for  SO2 
and  heavy  metals.  Sweden  has  the  7th  highest 
amount  of  emissions  of  heavy  metals  to  water, 
and  is  in  5th  position  for  emissions  intensity 
(above the EU average intensity of 0.864 kg / EUR 
billion GVA). The main contributors to emissions to 
water  in  Sweden  are  the  pulp  and  paper  industry 
for  all  pollutants,  and  the  metal  production  and 
processing sector for heavy metals and nitrogen. 

The  costs  of  pollution  go  beyond  the 
investment needs in pollution prevention and 
control. The latest available annual estimates for 
Sweden  (for  2022)  by  the  European  Environment 

(107) European Commission, DG Environment, Environmental 

investment needs & gaps assessment programme, 2025 
update. Expressed in 2022 prices. 

(108) SW4 Stockholm Agglomeration. 

(109) SW1 North Sweden and SW3 South Sweden 

(110) EEA, EIONET data repository, Link. 

(111) EEA, 2024, Harm to human health from air pollution in 

Europe: burden of disease status, 2024, Link. 

(112) Particulate matter (PM) is a mixture of aerosol particles (solid 
and liquid) covering a wide range of sizes and chemical 
compositions. PM10 refers to particles with a diameter of 10 
micrometres or less. PM2.5 refers to particles with a diameter 
of 2.5 micrometres or less. PM is emitted from many human 
sources, including combustion. 

(113) Low-level ozone is produced by photochemical action on 

pollution. This year, for the first time, the impact of long-term 
exposure to ozone has also been taken into account. In 
previous analysis by the European Environment Agency, only 
the impact of short-term exposure was estimated. 

(114) EEA, 2024, The costs to health and the environment from 
industrial air pollution in Europe – 2024 update, Link. 

(115) European Commission, DG Environment, Environmental 

investment needs & gaps assessment programme, 2025 
update. Expressed in 2022 prices. 

53 

 
 
 
Table A7.1:  Key clean industry and climate mitigation indicators: Sweden 

Source:  Net zero industry: European Commission: The net-zero manufacturing industry landscape across Member States: final 
report, 2025. Automotive industry transformation: Eurostat. Critical raw materials: Eurostat. Climate mitigation: See 
footnotes in the "climate mitigation" section; reduction of effort sharing emissions: EEA greenhouse gases data viewer; European 
Commission, Climate Action Progress Report, 2024. Sustainable industry: Years of life lost due to PM2.5: Eurostat and EEA, 
Harm to human health from air pollution in Europe: burden of disease status, 2024. Air pollution damage: EEA, EU large industry 
air pollution damage costs intensity, 2024. Emissions covered: As, benzene, Cd, Cr, Hg, NH3, Ni, NMVOC, NOX, Pb, dioxins, PM10, 
PAH, SOX. Water pollution intensity: EEA, EU large industry water pollution intensity, 2024. Releases into water covered from 
cadmium, lead, mercury, nickel. Other indicators: Eurostat. 

54 

Strategic autonomy and technology for the green transitionNet zero industryOperational manufacturing capacity 2023- Solar PV (c: cell, w: wafer, m: module), MW120-250 (m)- Electrolyzer, MW-- Wind (b: blade, t: turbine, n: nacelle), MW-- battery, MWh15500-16000Automotive industry transformation201720182019202020212022202320182021Motorisation rate (passenger cars per 1000 inhabitants), %479476473476477473472539561New zero-emission vehicles, electricity motor, %1.111.964.309.5218.9532.9138.631.038.96Critical raw materials201720182019202020212022202320182021Material import dependency, %26.825.023.723.924.423.624.222.6Climate mitigationTrendIndustry decarbonisation201720182019202020212022202320172022GHG emissions intensity of manufacturing production, kg/€0.190.180.190.180.160.15 0.340.27Share of energy-related emissions in industrial GHG emissions53.452.951.453.550.852.853.544.842.5Energy-related GHG emissions intensity of manufacturing74.573.473.469.562.457.1-158.4132.9and construction, kg/€Share of electricity and renewables in final energy consumption80.779.880.580.679.879.880.843.344.2in manufacturing, %Energy intensity of manufacturing, GWh/€1.841.801.801.981.661.571.691.291.09Share of energy-intensive industries in manufacturing production12.67.3GHG emissions intensity of production in sector [...], kg/€- paper and paper products (NACE C-17)0.270.280.280.260.220.20--0.730.68- chemicals and chemical products (NACE C20)----- --1.251.26- other non-metallic mineral products (NACE C23)2.012.081.691.731.591.54--2.532.24- basic metals (NACE C24)1.421.161.521.151.381.66--2.793.49Reduction of effort sharing emissions20182019202020212022202320182023GHG emission reductions relative to base year, % -32.8-36.9-37.8- domestic road transport-21.2-22.3-27.5-27.3-35.1-34.71.45.2- buildings-56.0-55.1-56.3-55.7-59.3-62.621.432.92005202120222023TargetWEMWAMEffort sharing: GHG emissions, Mt; target, gap, %43.229.127.326.9-50.0-6.20Sustainable industryTrendCircular economy transition20182019202020212022202320182021Material footprint, tonnes per person26.025.924.824.825.522.114.715.0Circular material use rate, %6.6        6.4        6.9        9.5        12.1      9.9        11.611.1Resource productivity, €/kg1.9        1.8        1.9        2.1        2.2        2.3        2.12.3Zero pollution industryYears of life lost due to PM2.5, per 100,000 inhabitants83        51        32        57        67        -702571Air pollution damage cost intensity, per thousand € of GVA    5.9            27.5      Water pollution intensity, kg weighted by human factors per bn € GVA    1.6   0.9SwedenEU-27SwedenEU-27SwedenEU-27 
 
 
 
 
 
  
 
ANNEX 8: AFFORDABLE ENERGY TRANSITION 

This  annex  outlines  the  progress  made  and 
the  ongoing  challenges  faced  in  enhancing 
energy  competitiveness  and  affordability, 
while advancing the transition to net zero. It 
examines  the  measures  and  targets  proposed  in 
the  final  updates  to  the  National  Energy  and 
Climate Plan (NECP) for 2030. 

Sweden  has  made  significant  progress  in  its 
clean  energy  transition  pathway,  and  has  no 
Russian gas imports since the beginning of 2025. 
Significant investments are required for expanding 
and  modernising  grids  given  their  importance  to 
achieve the 2030 objectives and to support lower 
prices if the internal bottlenecks in the network are 
addressed. 

Energy prices and costs 

share  of  electricity  prices 

Sweden  retail  energy  prices  decreased  in 
2024  compared  to  2024.  For  households, 
electricity  retail  prices  decreased  only  slightly,  by 
0.2%, but in a greater manner for gas with a 14% 
year-on-year  decrease.  The  energy  and  supply 
component 
for 
households is one of the lowest in the EU, and only 
contributes  26%  to  the  overall  price.  Non-
household prices decreased by 10% for electricity 
compared to 2023, and by 31% for gas. For non-
household  consumers,  Sweden  enjoys  the  second 
lowest price in the EU, notably due to a low taxes 
and  levies  component,  representing  only  0.9%  of 
the  total  price.  In  opposition,  Sweden  taxation  of 
household  and  non-household  consumers  gas 
supply makes Sweden the Member State with the 
highest  prices 
the  EU.  For  non-household 
consumers,  this  component  represents  34.3%  of 
the final price, compared to 11.6 at the EU level. 

Graph A8.1: Retail energy price components for 
household and non-household consumers, 2024 

(i) For household consumers, consumption band is DC for 
electricity and D2 for gas. Taxes and levies are shown 
including VAT. 
(ii) For non-household consumers, consumption band is ID for 
electricity and I4 for gas. Taxes and levies are shown 
excluding VAT and recoverable charges, as these are typically 
recovered by businesses. 
Source: Eurostat 

Thanks  to  a  large  share  of  renewables 
(69.5%)  and  nuclear  power  (29.2%)  in  its 
electricity  mix,  Sweden  had  the  EU’s  lowest 
wholesale  electricity  prices,  averaging  33.9 
EUR/MWh  in  2024(116)  (EU  average  of  84.7 
EUR/MWh). Along with the broader Nordic region, 
Sweden  experienced  price  spikes  in  the  winter 
months  of  early  2024  which  occurred  amid 
significant demand increases due to a cold winter 
(+16.1% and +10.9% in Jan. and Feb. vs the same 
period  in  2023,  respectively).  Prices  picked  up 
again  in  the  second  half  of  the  year  amid  rising 
natural  gas  costs  and  still  limited  non-fossil 
flexibility. 
In  November,  prices  spiked  further 
across  the  broader  Central  Western  European 
(CWE)  region  due  to  the  Dunkelflaute  which 
in 
negatively 
neighbouring markets. (117) 

day-ahead 

impacted 

prices 

(116) Fraunhofer (ENTSO-E data) 
(117) Yearly electricity data, Ember (consumption and generation 

data throughout the paragraph) 

55 

 
 
 
 
 
 
Graph A8.2: Monthly average day-ahead wholesale 
electricity prices and European benchmark 
natural gas prices (Dutch TTF) 

grid.  It  is  important  to  operationalise  the  regional 
coordination centre to ensure smooth coordination 
within the region and with neighbouring countries. 

In  2024,  Sweden  had  an  interconnectivity 
level  of  12.83%,  slightly  lower  than  the  EU 
target of at  least  15%  by  2030.  According  to 
Sweden’s  final  updated  NECP,  the  figure 
is 
expected  to  decrease  by  2027  despite  increasing 
interconnections  with  neighbouring  countries  due 
to  increased  domestic  electricity  generation.  The 
700 MW  Hansa  PowerBridge  high  voltage  DC 
interconnector  with  Germany  was  stalled  in  2024 
by the Swedish government, citing the single price 
zone  of  the  German  power  market  as  a  reason, 
because it would increase power costs in Sweden. 
In general, a better integrated European electricity 
market 
and 
socioeconomic  welfare.  Sweden  has  two  projects 
of common interest for electricity: the ‘Aurora Line’ 
and  ‘Aurora  Line  2’  connections  to  Finland.  The 
‘Aurora  Line’  is  expected  to  be  commissioned  in 
2025. 

efficiency 

improves 

overall 

Sweden would benefit from new transmission 
investments  and  renewal  of  parts  of  the 
existing transmission network. According to its 
network  development  plan 
for  2024-2033, 
the  Transmission  System 
Svenska  Kraftnät, 
Operator,  plans  to  increase  work  on  both  new 
investments and reinvestment in the grid over the 
includes  construction  of 
next  decade.  This 
approximately  1 500 km  of  new  transmission 
power  lines,  30  new  substations,  and  renewal  of 
over  2 500 km  of  power  lines  and  around  100 
substations.  Sweden  is  currently  assessing  the 
potential  for  grid  updates  and  for  adding  new 
grids to remove internal congestions. Also, the grid 
tariff  is  currently  undergoing  review,  and  an 
updated tariff model is to be decided, upon 2025, 
with  the  aim  to  be  implemented  during  2026. 
Further, 
communicating 
geographical  areas  suitable  for  new  connections 
to 
(production  and  consumption),  can 
investments where needed the most.  

identifying 

lead 

and 

interest 

As for hydrogen, Sweden has two projects of 
hydrogen 
common 
interconnectors: 
the  Nordic-Baltic  Hydrogen 
Corridor with Finland and the Baltic Sea Hydrogen 
Collector with Finland and Germany. 

for 

Challenges  to  Energy  System  Integration: 
creating  a  more  efficient  permitting  process 
to  construct  and  connect  to  the  grid  would 

56 

(i) the Title Transfer Facility (TTF) is a virtual trading point for 
natural gas in the Netherlands. It serves as the primary 
benchmark for European natural gas prices. 
(ii) Nordic and CWE respectively provide average prices in the 
Nordic (Denmark, Finland, and Sweden) and central-western 
European (Belgium, France, Germany, Luxembourg, the 
Netherlands, and Austria) markets. 
Source: S&P Platts and ENTSO-E 

Flexibility and electricity grids 

in 

the  Nordic 

Sweden 
is  part  of  the  Nordic  Capacity 
Calculation  Region  (CCR)(118)  but  also  has 
borders in the Baltic(119) and Hansa(120) CCRs. 
Cross-border  trade  capacities in  the  Nordic  region 
are  consistently  high.  Member  States  should 
ensure that a minimum of 70% of technical cross-
border  capacity  is  available  for  trading.  The 
borders 
region  are  highly 
interdependent  and,  to  support  system  operation, 
flow-based  market  coupling  was  successfully 
implemented  in  October  2024,  thereby  increasing 
the volume of capacities available for trade. Trade 
the  northern  borders  with 
capacities  across 
Norway, however, have little margins available for 
cross-zonal  trade,  although  it  is  possible  that  the 
introduction  of  flow-based  market  coupling  could 
support  increased  capacities  in  that  part  of  the 

(118) Norway, Sweden, Finland and Denmark are part of the Nordic 
CCR. A CCR is a group of countries which calculate cross-
border electricity trade flows together. 

(119) Finland, Sweden, Estonia, Latvia, Lithuania and Poland 

belong to the Baltic CCR. 

(120) The Hansa CCR includes Germany, the Netherlands, Denmark, 

Poland and Sweden. 

 
 
 
also  enable  Sweden  to  increase  the  pace  of 
grid  upgrades.  Currently  grid  connection  waiting 
times varies in Sweden: if connection is possible at 
a current grid station, the lead time is usually 3-4 
years. If a new station is required, the lead time is 
5-6 years. 

average  monthly  spot-price  contracts  and  14% 
other  types  of  contracts).  Consumers  are  also 
allowed  to  take  advantage  of  potential  cost 
savings  from  non-fixed  pricing.  This  consumer 
activation  is  mirrored  in  the  switching  rate,  which 
increased  to  10.7%  in  2024  from  7%  in  2023 
(unlike most Member States, where it decreased).  

capacity 

interconnection 

There is still scope in Sweden for significant 
investments  to  expand  and  modernise  its 
electricity  grid  (both  at  transmission  and 
distribution  level)  to  achieve  the  objectives 
of  the  Green  Deal.  Further  action  to  expand  its 
and 
cross-border 
strengthen its national  grid will enable Sweden to 
meet  rising  energy  demand,  integrate  renewable 
energy  production  more  effectively  and  improve 
grid  flexibility.  A  regulatory  reform  included  in 
REPowerEU  aimed  at  speeding  the  authorisation 
process  for  electricity  grid  construction,  thus 
reducing  the  bottlenecks  between  the  north  and 
south  of the  country,  entered  into  force  on  1 July 
2024.  Increasing  instances  of  negative  pricing  in 
the  four  bidding  zones  of  the  country  (SE1  and 
SE2  434,  SE3 429  and  SE4 368)  highlight  the 
need to make the system more flexible. Sweden is 
already  in  a  position  to  take  some  steps  to  allow 
more  flexibility  in  the  market.  Sweden  shows 
(renewable  energy 
35 462.78 GWH  of  RES 
sources) curtailment. 

On flexibility: Sweden has not set a national 
quantified objective for flexibility, but it has 
clear  objectives  for  non-discrimination  of 
demand  response,  storage  and  flexibility.  To 
this end, it is introducing policies that enable non-
discriminatory  participation  of  new  flexibility 
services.  Sweden  is  further  developing  energy 
markets  at  regional  level  for  balancing  products, 
which  would  allow  more  types  of  resources  and 
stakeholders  to  participate  in  trade.  Legislation 
also  allows  electricity  grid  companies  to  pilot 
smaller-scale  tariffs  to  stimulate  more  efficient 
grid  use  through  demand  response.  A  Dialogue 
Forum  explores  ways  to  develop  regulatory 
to  offer 
frameworks,  enabling  aggregators 
flexibility  and  support  services 
in  a  well-
functioning market.  

in 

terms 

is  quite 
In  the  retail  market,  Sweden 
advanced 
empowering 
consumers,  as  they  have  a  wide  choice  and 
their  uptake  of  dynamic  and  flexible 
electricity  pricing  contracts  stands  at  86% 
(of  which  14%  dynamic  pricing  contracts,  56% 

of 

There  are  no  regulated  price  measures  in 
force  in  Sweden.  Consumers  can  benefit  from 
smart metering, as the roll-out is 100%. There are 
no  regulated  price  measures  in  force.  Sweden  is 
also  one  of  the  Member  States  with  the  highest 
share of heat pumps installed, at more than 30%. 
However,  the  proportion  of  household  prosumers 
(consumers  who  both  produce  and  consume 
energy) in Sweden corresponds to the EU average 
(around  5%  of  all  households).  Sweden  has  191 
projects  that  can  be  considered  as  energy 
communities. However, no specific initiatives have 
support 
been 
frameworks  for  renewable  energy  communities 
and  citizen  energy  communities,  as  laid  down  in 
the Renewable Energy Directive and in the Internal 
there 
Electricity  Market  Directive,  nor  are 
programmes  or 
incentives  to  promote  them. 
Sweden  is  one  of  the  few  Member  States  to 
provide  comparison  tools  that  meet  all  the  legal 
including  full  market  coverage, 
requirements, 
including dynamic contract comparison. 

that  enable  and 

identified 

In  2023,  electricity  accounted  for  33.2%  of 
Sweden’s  final  energy  consumption,  above 
the EU average of 22.9%, and this share has 
seen  a  slight  increase  in  the  last  decade5. 
When it comes to households, electricity  accounts 
for  48.2%  of  final  energy  consumption,  while  in 
industry  it  represents  33.8%  (see  also  Annex  7). 
For  the  transport  sector,  this  share  remains 
in 
negligible 
electrification  across  sectors  is  required  for  cost 
effectively  decarbonising 
the  economy  and 
bringing  the  benefits  of  affordable  renewable 
generation to consumers. 

at  5.8%. 

progress 

Further 

Renewables and long-term contracts 

In  2024,  the  share  of  renewables 
in 
electricity  reached  69.45%,  well  above  the 

57 

 
EU  overall  RES  share  of  47%(121).  In  2024, 
total renewable energy capacity installed was 42.3 
GW  (a  5%  increase  on  2021).  Wind  and  solar 
capacities  installed  in  2024  were  respectively 
17.239 MW and 4.963 MW.  

Graph A8.3: Sweden’s installed renewable capacity 
(left) and electricity generation mix (right) 

Sweden  has  an  active  market  for  Power 
Purchase  Agreements  (PPAs),  mostly  based 
on  wind  generation  installations,  with  some 
solar photovoltaics projects. The dynamism of 
this market depends on the existence of a healthy 
pipeline  of  renewable  energy  projects  and  on 
expanding access to the market to include smaller 
entities. 

Energy efficiency  

(FEC) 

energy 

primary 

consumption 

increased  by  0.2% 

Slow  but  steady  improvements  in  energy 
efficiency  have  been  made,  albeit  with 
modest  reductions  across  most  sectors.  In 
2023, 
(PEC) 
decreased  by  2.7%  to  41.41 Mtoe.  Final  energy 
consumption 
to 
30.26 Mtoe. Compared to 2022, FEC decreased in 
most  main  sectors:  in  residential  by  0.2%,  in 
transport by 1.8% and in services by 1.1%. In the 
industrial  sector,  FEC  increased  by  2.8%.  As  per 
the  recast  Energy  Efficiency  Directive  (Directive 
(EU)  2023/1791),  Sweden  should  try  to  achieve  a 
PEC  of  35.8 Mtoe  and  an  FEC  of  24.7 Mtoe  by 
2030,  which  would  require  a  decrease  of  13.5% 
and 18.4%, respectively. 

of 

the 

energy 

slowdown 

The 
efficiency 
improvements in Sweden has the potential to 
jeopardise the likelihood of Sweden achieving 
the  European  targets  for  2030,  as  well  as 
pose  a  risk  to  the  country’s  own  long-term 
target  to  achieve  net-zero  emissions  by 
2045. In its updated NECP, Sweden’s contribution 
in  terms  of  FEC  is  not  in  line  with  Article 4  of 
Directive  (EU)  2023/1791,  and  overall,  PEC  and 
FEC contributions present large gaps compared to 
both 
indicative 
indicative  and  corrected 
formulas  of  the  Directive.  Sweden  has  introduced 
measures  to  develop  infrastructure  for  high-
efficiency  cogeneration  and  efficient  district 
heating  and  cooling  using  waste  heat  and 
renewable  energy  sources,  particularly  in  the 
industrial  sector. This includes both high and low-
large 
value 
industrial  installations,  which  can  be  directed  to 
the district heating network or other operators who 
can benefit from it, encouraging local activities to 
systematically  use  and  reuse  leftover  energy. 
Sweden  has  notified  the  Commission  of 
its 
comprehensive  heating  and  cooling  assessment 
identifying  potential  for  the  application  of  high-

residual  heat,  especially 

from 

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

Sweden’s  proposed  share  of  renewable 
energy of 67%, as a contribution towards the 
is 
renewable  energy 
2030  EU 
significantly  below  the  required  level  laid 
down  in  the  Governance  Regulation.  This  is 
despite Sweden having high untapped potential to 
achieve a higher share of renewables for 2030, for 
onshore and offshore wind power. 

target, 

permit-granting 

Sweden  has  put  in  place  several  reforms  to 
facilitate 
procedures, 
including  a  one-stop-shop  for  renewable 
energy  projects  in  line  with  the  Renewable 
Energy  Directive.  The  country  aims  to  further 
improve  permitting 
through  digitalisation  of 
administrative procedures. Additionally, it plans to 
define  acceleration  areas to  facilitate  wind power 
projects,  which  have  faced  significant  challenges 
recently.  The  government  has  taken  important 
steps to address the municipal veto that hampers 
the  uptake  of  wind  energy  projects  in  Sweden  by 
introducing  a  set  of  financing  incentives  focusing 
on  income-sharing  models  for  nearby  residents 
and introduce incentives for municipalities hosting 
wind projects to take effect as of 2025. Sweden is 
encouraged  to  swiftly  implement  the  revised 
Renewable  Energy  Directive  with  a  view  to 
transposing it by 21 May 2025. 

(121) Yearly electricity data, Ember. 

58 

 
 
 
efficiency  cogeneration  and  efficient  district 
heating and cooling in line with Article 25(1) of the 
Energy Efficiency Directive (EU) 2023/1791. 

Building  energy  use:  Sweden  is  expected  to 
maintain  the  residential  sector’s  positive 
contribution  to  its  2030  target  for  reducing 
the  energy  consumption  of  buildings. 
Its 
residential  final  energy consumption has followed 
a  long-term  downward trend  (-8% between  2020 
and  2022),  in  line  with  the  targets  set  out  in 
Sweden´s  long-term  renovation  strategy.  Data 
from  2023  suggest  that  the  downward  trend  is 
being  maintained.  In  2022,  heating  and  cooling 
represented 71% of the country’s residential final 
energy  consumption,  of  which  67%  comes  from 
renewables.  Approximately  196 000  heat  pumps 
were sold in 2023, representing a decrease of 9% 
compared  to  the  previous  year.  Sweden  offers  a 
30% tax rebate on labour costs when carrying out 
renovations,  including  the  installation  of  heat 
pumps.  Sweden  is  reporting  a  low  number  of 
checks  performed  on  products  subject  to  eco-
design and energy labelling, which raises concerns 
with  respect  to  the  compliance  levels  of  the 
products in question, potential missed  energy  and 
CO2 savings and consumer trust. 

role 

Financing of energy efficiency measures and 
energy  renovations:  grants  still  play  an 
important 
in  Sweden’s  dedicated 
financial  schemes  for  energy  efficiency,  but 
other  financial  solutions,  such  as  green 
bonds and tax rebates, are also used. In 2024 
Sweden  continued  to  implement  the  planned 
energy  efficiency  financing  schemes,  especially 
under  the  Recovery  and  Resilience  Facility  (RRF) 
and the ‘Climate Leap (Klimatklivet)’ and ‘Industry 
Leap (Industriklivet)’ programmes addressed to all 
sectors.  In  the  2023  budget,  the  government 
allocated  approximately  SEK 1.2  billion  in  2023-
2025  to  support  the  conversion  of  heating 
systems and energy-efficient renovation of single-
family  homes  that  are  heated  with  direct-acting 
electricity or gas. 

Security of supply and diversification 

limited (oil accounting for 19.6%, solid fossil fuels 
for 3.1% and natural gas for only 1.5%). 

Fossil fuel subsidies 

In  2023,  environmentally  harmful(122)  fossil  fuel 
subsidies  without  a  planned  phase-out  before 
represented  0.15%(123)  of  Sweden’s 
2030 
GDP(124),  below  the  EU  weighted  average  of 
0.49%.  Tax  measures  accounted  for  the  full 
volume.  Additionally,  Sweden’s  2023  Effective 
Carbon Rate(125) averaged EUR 89.69 per tonne of 
CO₂,  above  the  EU  weighted  mean  of  EUR 
84.80(126). 

(122) Direct  fossil  fuel  subsidies  that  incentivise  maintaining  or 
increasing  in  the  availability  of  fossil  fuels  and/or  use  of 
fossil fuels. 

(123) Numerator  is  based  on  volumes.  For  all  Member  States,  it 
includes public R&D expenditures for fossil fuels as reported 
by the IEA (Energy Technology RD&D Budgets) and excludes, 
for  methodological  consistency,  excise  tax  exemption  on 
kerosene 
traffic.  Tax 
expenditures  have  been  included  on  a  horizontal  basis  to 
ensure  a  comprehensive  inventory  of  incentives  for  fossil 
fuel  use  across  Member  States.  Sweden  has  reservations 
about the methodology used and would prefer an alternative 
approach. 

intra-EU27  air 

consumed 

in 

Sweden’s  overall  energy  mix  in  2023  was 
highly  reliant  on  renewables  and  biofuels 
(49.6%) and nuclear (24.3%). Fossil fuels were 

(124) 2023 Gross Domestic Product at market prices, Eurostat. 
(125) The  Effective  Carbon  Rate  is  the  sum  of  carbon  taxes,  ETS 
permit  prices  and  fuel  excise  taxes,  representing  the 
aggregate effective carbon rate paid on emissions. 
(126) OECD (2024), Pricing Greenhouse Gas Emissions 2024 

59 

 
 
Table A8.1:  Key Energy Indicators 

Source: Eurostat, ENTSO-E, S&P Platts 

60 

20212022202320242021202220232024Household consumer - Electricity retail price (EUR/KWh)0.2361          0.2347              0.2390              0.2386          0.2314              0.2649          0.2877          0.2879          Energy & supply [%]31.2%50.5%33.9%26.1%36.6%54.3%55.6%47.8%Network costs33.8%35.1%31.9%38.2%26.7%25.3%24.8%27.2%Taxes and levies including VAT35.0%14.4%34.2%35.7%36.7%20.3%19.6%25.0%VAT19.9%25.0%20.0%20.0%14.5%13.4%13.8%14.6%Household consumer - Gas retail price0.1745          0.2453              0.2103              0.1803          0.0684              0.0948          0.1121          0.1128          Energy & supply42.9%52.8%49.5%41.6%43.7%61.0%64.5%53.9%Network costs20.6%15.9%17.3%21.3%22.5%17.3%17.1%18.3%Taxes and levies including VAT36.6%31.3%33.2%37.1%33.8%21.7%18.4%27.8%VAT20.0%20.0%20.0%20.0%15.5%11.6%10.2%13.6%Non-household consumer - Electricity retail price0.0748          0.1060              0.0870              0.0779          0.1242              0.1895          0.1971          0.1661          Energy & supply59.3%65.4%63.1%57.3%43.0%66.5%63.0%55.8%Network costs19.6%14.0%16.3%22.0%15.8%10.7%11.9%15.5%Taxes and levies excluding VAT1.5%0.7%0.8%0.9%30.4%9.9%11.2%15.4%Non-household consumer - Gas retail price0.0863          0.1547              0.1311              0.0898          0.0328              0.0722          0.0672          0.0517          Energy & supply52.5%62.5%59.0%45.9%66.2%77.3%77.3%68.7%Network costs5.9%3.3%4.0%6.7%7.7%3.8%5.3%7.1%Taxes and levies excluding VAT26.9%17.8%21.2%34.3%12.5%6.1%7.3%11.6%Wholesale electrity price (EUR/MWh)57.8100.349.333.9111.0233.299.184.7Dutch TTF (EUR/MWh)n/an/an/an/a46.9123.140.534.420172018201920202021202220232024Gross Electricity Production (GWh)164 250        163 400            168 439            163 833        171 798           173 159        166 093        -Combustible Fuels15 547       15 571           16 390           13 618       16 137          16 015       14 024       -Nuclear65 696       68 549           66 130           49 198       52 965          51 944       48 470       -Hydro65 168       62 250           65 393           72 440       73 926          69 967       66 240       -Wind17 609       16 623           19 847           27 526       27 244          33 253       34 245       -Solar230             407                679                1 051         1 526             1 980         3 114         -Geothermal-              -                 -                 -              -                 -              -              -Other Sources-              -                 -                 -              -                 -              -              Gross Electricity Production [%]Combustible Fuels9.5%9.5%9.7%8.3%9.4%9.2%8.4%-Nuclear40.0%42.0%39.3%30.0%30.8%30.0%29.2%-Hydro39.7%38.1%38.8%44.2%43.0%40.4%39.9%-Wind10.7%10.2%11.8%16.8%15.9%19.2%20.6%-Solar0.1%0.2%0.4%0.6%0.9%1.1%1.9%-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)-18 992-17 223-26 161-24 997-25 568-33 219-28 492-As a % of electricity available for final consumption -14.6%-13.2%-20.5%-19.8%-19.5%-26.4%-23.1%-Electricity Interconnection [%]25.6%26.0%25.2%24.2%16.3%14.4%12.8%12.8%Share of renewable energy consumption - by sector [%]Electricity65.9%66.2%71.2%74.5%75.8%83.4%87.5%-Heating and cooling63.6%63.3%64.4%66.4%68.5%69.8%67.1%-Transport26.8%29.7%30.3%31.9%28.7%28.8%33.6%-Overall53.4%53.9%55.8%60.1%62.5%66.3%66.4%-20202021202220232020202120222023Import Dependency [%] 32.0%21.2%27.0%26.4%57.5%55.5%62.5%58.3%of Solid fossil fuels 98.8%94.2%104.7%96.4%35.8%37.2%45.9%40.8%of Oil and petroleum products 118.1%72.4%104.4%99.6%96.8%91.7%97.8%94.5%of Natural Gas 100.0%100.0%102.5%102.3%83.6%83.6%97.6%90.0%Dependency from Russian Fossil Fuels [%]of Natural Gas 12.7%9.8%8.4%12.9%41.0%40.9%20.7%9.3%of Crude Oil8.0%8.7%2.5%0.0%25.7%25.2%18.4%3.0%of Hard Coal23.8%30.8%4.8%0.0%49.1%47.4%21.5%1.0%2017201820192020202120222023Gas Consumption (in bcm)1.1                 1.2                     1.1                     1.1                 1.2                    0.8                 0.8                 Gas Consumption year-on-year change [%]23.9%7.2%-6.6%-2.8%5.6%-32.3%-1.2%Gas Imports - by type (in bcm)1.1                 1.1                     1.1                     1.4                 1.2                    0.8                 0.9                 Gas imports - pipeline0.8                 0.8                     0.8                     0.8                 0.8                    0.6                 0.6                 Gas imports - LNG0.30.30.30.70.40.20.4Gas Imports - by main source supplier [%]Denmark70.6%70.2%72.4%52.0%66.6%76.2%60.5%Russia0.0%0.0%0.0%12.7%9.8%8.4%12.9%Netherlands5.5%7.9%4.5%7.3%5.5%3.7%7.3%Norway18.4%12.6%12.2%8.5%3.7%8.0%5.8%SwedenEU 
 
   
 
ANNEX 9: CLIMATE ADAPTATION, PREPAREDNESS AND ENVIRONMENT 

Sweden  is  affected  by  a  decline  in  carbon 
removals  within  land  use,  land  use  change, 
and  forestry  (LULUCF),  and  is  projected  not 
to meet the 2030 target. At the same time, the 
degradation  of  vital  ecosystems,  particularly 
protected  forest  habitats,  threatens  biodiversity 
and  economic  sectors  dependent  on  ecosystem 
services.  The  country’s  rapid  temperature  rise 
compounds these issues, increasing the occurrence 
of  heatwaves,  droughts  and  wildfires.  Significant 
gaps in funding and policy implementation remain. 
Closing  these  gaps  is  essential  to  preserving 
Sweden’s  environmental  integrity  and  economic 
resilience. 

Climate adaptation and preparedness 

Sweden’s  main  challenge  is  the  rate  of 
temperature  rise.  It  is  around  twice  as  high  as 
the  global  average,  with  an  increase  of  about 
+2 °C  compared  with  the  mid-1800s.  In  recent 
decades,  Sweden  has  seen  an  increase  in  the 
number  and  intensity  of  heatwaves,  which  can 
also lead to local  droughts and wildfires. In some 
municipalities, droughts  in  2018  led to  temporary 
water scarcity (127). 2018 was also Sweden's worst 
year  ever  in  terms  of  wildfires,  with  nearly 
20 000 ha  of  forest  and  other  wooded  land 
burnt (128).  Sweden  is  also  expected  to  experience 
increased precipitation and more frequent extreme 
rainfall  events  due  to  climate  change,  raising  the 
risk  of  flooding,  particularly  in  southern  regions 
and  parts  of  the  northern  mountains.  Rising  sea 
levels,  especially  in  southern  coastal  areas,  will 
further heighten the risk of coastal flooding (129).  

risks  directly  affect  Sweden’s 
Climate 
society  and  economy.  Over  the  period  1980-
2023 a total of EUR 3.7 billion in economic losses 
was  caused  by  weather  and  climate-related 
extreme  events.  These  developments  are  likely  to 
have  a  particular  impact  on  vulnerable  groups. 
However, overall, climate-related human costs and 
economic  losses  in  Sweden  are  low  compared  to 

the rest of the EU. Between 1980 and 2023 there 
were  44  recorded  fatalities  caused  by  climate-
related  extreme  events,  the  fourth  lowest  in  the 
EU. Economic losses during that period account for 
0.5%  of  all  economic  losses  caused  by  weather 
extreme  events  in  the  EU,  with  26%  of  economic 
losses  insured.  This  is  the  third  lowest  value  of 
economic losses per capita in the EU, after Estonia 
and 
Financial 
Supervisory Authority nevertheless launched an in-
depth  analysis  to  examine  how  increased  risks  of 
extreme weather may affect consumers’ insurance 
coverage (131). 

Luxembourg (130), 

but 

the 

Sweden has strengthened climate adaptation 
actions  at  both  national  and  regional  levels. 
Since  2018  it  has  implemented  the  National 
Adaptation Strategy (NAS), revised and updated in 
2024  (132),  as  well  as  the  Adaptation  Ordinance 
since  2019,  which  requires  national  authorities 
(CABs)  to 
and  county  administrative  boards 
integrate  adaptation  measures  into  their  work. 
Sweden’s  assessment  of  risks  and  vulnerabilities 
has  been  enhanced 
through  sector-specific 
evaluations  covering  key  climate  risks  such  as 
heatwaves,  floods  and  drought.  The  Swedish 
Meteorological  and  Hydrological  Institute  plays  a 
central  role  in  providing  climate  data  to  inform 
these  efforts.  Further  measures  are  planned  to 
risk  assessments  and  monitoring 
improve 
frameworks,  and  a  national 
climate  and 
vulnerability analysis and policy evaluation will be 
presented  in  December  2026  (133)  .  Adaptation  is 
mainstreamed  across  policies,  and  Sweden  has 
increased  funding  for  municipalities  to  support 
preventive  measures  to  tackle  natural  disasters, 
including  landslides  and  floods.  The  NAS  sets 
priorities  for  adaptation  across  seven  key  areas, 
including  water  supply  shortages,  biodiversity 
protection,  and  impacts  on  infrastructure  and 

(130) EEA, 2024, Economic losses from weather- and climate-

related extremes in Europe, Link. 

(131) Finansinspektionen, 2025, FI granskar hur extremväder kan 

påverka konsumenters försäkringsskydd, Link. 

(127) EEA, 2024, European Climate Risk Assessment, p. 212. 

(128) EEA, 2024, European Climate Risk Assessment, p. 246. 

(132) National Adaptation Action Plan - 

https://www.regeringen.se/rattsliga-
dokument/skrivelse/2024/03/skr.-20232497 

(129) Klimatunderlag för klimat- och sårbarhetsanalyser - 
https://www.smhi.se/publikationer-fran-smhi/sok-
publikationer/2025-02-10-klimatunderlag-for-klimat--och-
sarbarhetsanalyser 

(133) Climate Adaptation Council to develop new national climate 

and vulnerability analysis - 
https://klimatanpassningsradet.se/nyheter/nyheter/2024-01-
25-ny-nationell-klimat--och-sarbarhetsanalys-ska-tas-fram 

61 

 
 
 
 
 
 
public  health (134)).  Sweden  also  makes  use  of 
various  EU  funds  to  improve  its  preparedness. 
These include the European Regional Development 
Fund and the Recovery and Resilience Facility. 

Climate adaptation is also addressed at sub-
national  level.  Sweden  has  strengthened  its 
national support structures for regional adaptation. 
There are also a wide  range of local and regional 
adaptation  policies  and  actions,  and  Swedish 
municipalities  and  regions  are  active  in  the  EU 
Mission  on  Adaptation  to  Climate  Change.  Of  the 
294  EU  regions  and  local  authorities  participating 
in  the  EU  Mission  on  Adaptation  to  improve  their 
work  on  climate  adaptation,  eight  are  in  Sweden, 
including authorities from the three most populous 
counties (135). 

Water resilience 

environment. 

Water-related  ecosystems  are  vulnerable  to 
the effects of climate change, such as water 
shortages,  droughts  and  floods.  Moreover, 
hydropower  and 
land  drainage  pose  a 
significant  threat  to  the  biodiversity  in  the 
water 
aquatic 
productivity,  standing  at  EUR 222  per  m3  of 
abstracted  water,  is  the  fifth  highest  in  the 
EU (136).  The  water  exploitation  index  plus  (WEI+) 
reached  0.3  in  2022,  which  is  the  second-best 
result  in  the  EU.  The  economic  sector  with  the 
highest  water  consumption 
is  manufacturing, 
which absorbed 431 million m3 of water in 2022. 

Sweden’s 

The  assessment  of  the  third  river  basin 
management  plan  (covering  the  time  period 
2022-2027)  shows  a  minor  improvement  in 
the  ecological  status/potential  of  surface 
water  bodies,  and  no  improvement  in  their 
chemical  status,  as  compared  to  the  status 
reported  in  the  second  plan.  There  has  been  a 
slight  deterioration  in  the  quantitative  status  and 
chemical  status  of  groundwater  bodies.  About 
41%  of  surface  water  bodies  are  classified  as 

(134) European Commission, 2023, Assessment of progress on 
climate adaptation in the individual Member States 
according to European Climate Law, Link. 

(135) EU Mission on Adaptation, Link. 

for  Marine 

having  good  or  better  ecological  status/potential, 
showing  some  improvement  compared  to  the 
second  plan.  However,  the  degree  of  monitoring 
has fallen, so that now only 21% of surface water 
bodies  are  monitored 
to  assess  ecological 
status/potential. The analysis of Sweden’s plan has 
from  agriculture  as  a 
identified  nutrients 
significant  pressure 
for  groundwater/surface 
water,  affecting  its  good  status.  According  to  the 
and  Water 
Swedish  Agency 
Management,  hydropower  represents  the  most 
significant  pressure  on  lake  and  river  water 
bodies (137).  Almost  4 000  river  water  bodies  and 
1 000  lake  water  bodies  are  affected  by  water 
regulation  or  lack  of  connectivity.  While  Sweden 
has introduced a national assessment plan (138) to 
review the permits of hydropower plants that have 
a  significant  effect  on  water  bodies,  the  review 
process is expected to take until the early 2040s, 
which  means  that  Sweden  does  not  expect 
improvements to hydromorphological conditions to 
be  achieved  by  2027.  Coastal  water  bodies  are 
also under pressure, with 79% reported as having 
less than good ecological status. Furthermore, only 
2% of highly modified and artificial surface water 
bodies have a good ecological potential. By 2027, 
less  than  50%  of  surface  water  bodies  are 
expected 
ecological 
status/potential. 

achieve 

good 

to 

a 

Treatment  Directive. 

While  the  current  water  treatment  and 
compliance 
levels  are  high,  significant 
investment  will  be  required  to  meet  the 
stricter  standards  of  the  revised  Urban 
Wastewater 
This 
investment  would  create  a  financial  gap  in  water 
sector funding needs. In Sweden, the rate of load 
collection  from  agglomerations  of  more  than 
2 000  p.e. 
is  100%,  while  97%  of  urban 
wastewater  meets  all  the  requirements  of  the 
Urban  Wastewater  Treatment  Directive.  However, 
the revised Directive (to be transposed by 31 July 
2027)  introduced  stricter requirements,  so  efforts 
will be needed to ensure compliance with the new 
standards.  As  shown  in  Graph  A9.2,  the  annual 
water  investment  needs  amount  to  an  estimated 
equivalent to EUR 1.2 billion over the period 2021-
2027.  These  include  investment  needs  for  the 
industry,  environmental  protection  and 
water 

(137) Swedish Agency for Marine and Water Management, 2019, 

Towards sustainable hydropower in Sweden, Link. 

(136) Measured as GDP in 2010 chain linked volumes over total 

(138) The Swedish Energy Agency, 2019, Nationell plan för 

fresh surface water abstracted in cubic metres. 

omprövning av vattenkraft, Link. 

62 

 
 
 
main  pressure  is  forestry  (including  conversion  to 
less  biodiverse  forests),  followed  by  energy 
production (biomass) and natural processes. 

The  degradation  of  nature,  and  forest 
ecosystems  in  particular,  create  risks  to 
Sweden's  economy  and  competitiveness 
Several  sectors,  such  as  forestry,  agriculture, 
fisheries,  construction  and  water  utilities  (see 
Graph  A9.1),  are  particularly  vulnerable,  with 
100%  of  the  gross  value  added  of  these  sectors 
directly  dependent  on  ecosystem 
services. 
Sweden’s  economy  is  also  highly  dependent  on 
ecosystem services in its supply chain, amounting 
to  28%  of  gross  value  added.  This  reflects  a 
particularly  high  dependency 
in  forestry  and 
healthcare. This means that failure to maintain the 
capacity  of  ecosystems  to  deliver  services  could 
entail  significant  costs  or  even  stop  production  in 
these  sectors.  Protecting  and 
restoring  key 
ecosystems  would  ensure  that  the  long-term 
competitiveness  of  these  economic  sectors  is 
preserved. 

water management. Water investments in Sweden 
are  estimated  at  SEK  7.82  billion  equivalent  to 
around  EUR 736  million  per  year (139),  leaving  a 
gap  of  approximately  EUR 473  million  per  year 
(around 0.1% of gross domestic product), of which 
to  wastewater 
EUR 287  million  are 
measures  (also  including  the  additional  costs  of 
the  revised  Directive).  Drinking  water  measures 
require  an  additional  EUR 16  million  per  year  and 
the  other  aspects  of  the  Water  Framework 
Directive around EUR 165 million per year. 

linked 

Biodiversity and ecosystems 

forest 

protected 

The  state  of  nature  and  ecosystems,  in 
particular 
habitats, 
continues  to  degrade  in  Sweden.  According  to 
the  assessment  under  the  EU  Habitats  Directive 
covering  the  years  2013-2018,  the  share  of 
favourable  conservation  statuses  has  been 
relatively stable since the last reporting period (i.e. 
2007-2012).  The  share  of  habitats  classified  as 
having  good  conservation  status  accounted  for 
22.6%  in  2018  compared  to  the  25.7%  reported 
under the previous assessment period. In the case 
of  protected  species,  the  share  of  assessments 
indicating a good conservation status in 2018 has 
slightly  increased,  reaching  47.45%  (compared  to 
the  45.5%  during  the  previous  period).  However, 
conservation  statuses  are  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% (two habitat 
in  the  Alpine  region)  have  favourable 
types 
conservation  status.  Forest  degradation  has  been 
more pronounced  in  the  northern  part  of  Sweden. 
international 
According  to  research  using  an 
of 
system 
accounting 
environmental-economic  accounting  -  ecosystem 
accounting)  that  makes  it  possible  to  aggregate 
seven  different  variables  into  a  single  condition 
index,  the  average  forest  condition  in  the  Boreal 
region  changed  from  0.625  in  2000  to  0.605  in 
2018.  This  is  a  decline  of  2%,  mainly  driven  by 
lower  soil 
lower  ecosystem  productivity  and 
organic  carbon (140)(141).  For  forest  habitats,  the 

framework 

(the 

(139) Calculated using the average annual exchange rate of 2022 

which stood at 10.63 EUR/SEK according to Eurostat. 

(140) Barredo, J.I. et al., 2023, Accounting for forest condition in 
Europe based on an international statistical standard, Link. 

(141) The storage and release of organic matter and carbon is one 
of the key ecosystem services provided by soils. A loss in soil 
organic carbon stock reduces the soil’s capability to offset 
GHG emissions by storing carbon, harms biodiversity and 
biomass production and reduces other regulatory services 
(e.g. flood regulation). 

63 

 
 
 
Graph A9.1: Direct dependency(1) on ecosystem 
services(2) of the gross value added generated by 
economic sector in 2022 

and  preserve  biodiversity  (see  Graph  A9.2).  The 
current  level  of  financing  for  biodiversity  and 
ecosystem  conservation  in  Sweden  is  around 
EUR 655 million per year, leaving a gap of around 
EUR 6  billion  per year,  corresponding  to  1.09%  of 
the  country’s  GDP.  This  shortfall  puts  Sweden’s 
commitment  to  global  biodiversity  agreements  at 
risk. 

Graph A9.2: Investment needs and gaps in EUR 
million, in 2022 constant prices 

(1) Dependency based on the sector’s own operations, 
excluding value chain operations within countries and across 
international value chains. A high dependency indicates a high 
potential exposure to nature-related shocks or deteriorating 
trends, which means that the disruption of an ecosystem  
service could cause production failure and severe financial 
loss. 
(2) Ecosystem services are the contributions of ecosystems to 
the benefits that are used in economic and other human 
activity, including provisioning services (e.g. biomass 
provisioning or water supply), regulating and maintenance 
services (e.g. soil quality regulation or pollination), and cultural 
services (e.g. recreational activities). 
Source: Hirschbuehl et al., 2025, The EU economy's 
dependency on nature, Link. 

Targeted  action  on  nature  protection  and 
restoration is needed in order to meet nature 
restoration  targets.  Taking  into  account  both 
Natura  2000  and  other  nationally  designated 
protected areas, Sweden legally protects 14.9% of 
its  land  area (EU  average  26%)  and  15.5%  of  its 
marine  areas  (EU  average  12%).  Sweden  also 
needs  to  restore  up  to  76 120  km2  of  habitats 
listed 
I  to  the  Habitats  Directive, 
corresponding to  up  to  16.9%  of  its  territory  (142). 
Sweden requires EUR 6.7 billion of investment per 
year to effectively conserve and restore its natural 
capital,  mitigate  the  impacts  of  climate  change 

in  Annex 

Source: European Commission, DG Environment, 
Environmental investment needs & gaps assessment 
programme, 2025 update. 

Sustainable agriculture and land use 

Sweden’s  carbon  removals  fall  short  of  the 
level  of  ambition  needed  to  meet  its  2030 
target  for  land  use,  land  use  change  and 
forestry  (LULUCF).  Sweden  is  facing  significant 
challenges  in  enhancing  the  carbon-absorbing 
capacity of its land-use sector, as carbon removals 
have  declined  at  a  rapid  pace  in  recent  years.  To 
meet  its  2030  LULUCF  target,  additional  carbon 
removals  of  4.0  million  tonnes  of  CO2  equivalent 
(CO2eq)  are  needed (143).  The 
latest  NECP 
projections  show  a  gap  to  target  of  13.3  million 

(142) European Commission, 2022, Impact assessment 

accompanying the proposal for a Regulation on nature 
restoration. 

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

Regulation (EU) 2023/839. 

64 

0%20%40%60%80%100%AgricultureForestryFishery and acquacultureMining and metalsConstructionWater utilitiesHealthcare deliveryAviation travel and tourismFood beverages and tobaccoSupply chain and transportPublic services and othersElectricityChemical and materials industryElectronicsOil and gasReal estateHeat utilitiesAutomotiveRetail consumer goods and…Information technologyBanking and capital marketsInsurance and asset…Digital communicationsHighMediumLow020406080100120140160180BiodiversityWaterBaselineGap 
   
 
 
   
 
for  2030 (144).  Additional 
tonnes  of  CO2eq 
measures therefore need to be applied in order to 
achieve the 2030 target. 

Swedish  agriculture  is  still  a  notable  source 
of  greenhouse  gas  emissions  and  continues 
to  have  a  significant  impact  on  air,  water 
and soils. In 2022, agriculture was responsible for 
a  total  of  6.5  million  tonnes  of  CO2  equivalent, 
accounting  for  around  14%  of  the  country’s  total 
emissions  (excluding  LULUCF).  Sweden's    utilised 
agricultural  area  amounted  to  nearly  3  million 
hectares  in  2023  and  has  remained  quite  stable 
for the last decade. Although the livestock density 
index was 0.55 in 2020, below the EU average of 
0.75,  levels  of  pesticides  exceeding  established 
thresholds  were  detected  in  25%  of  reported 
monitoring  sites 
in  surface  water  bodies, 
compared to the EU average of 11.6% (145). 

Sweden is transitioning to a sustainable food 
system  by  implementing  policies  to  reduce 
the  environmental  impact  of  agriculture.  In 
2022, 8.1% of its agricultural land  had landscape 
features  such  as  woods  and  non-productive 
grasslands,  which  is  above  the  EU  average  of 
5.6%.  Organic  farming,  with  reduced  use  of 
synthetic  fertilisers  and  pesticides,  made  up  20% 
of  Sweden’s  agricultural  land.  While  this  is  the 
third  highest  value  in  the  EU,  the  data  show  a 
slightly  declining  trend  over  the  past  years.  The 
Swedish common agricultural policy strategic plan 
will  use  30%  (about  EUR 1.3  billion)  of  the  EU 
financial  contribution  to  support  environmental 
and  climate  objectives,  focusing  on  carbon 
valuable 
sequestration, 
grasslands,  as  well  as  increasing  knowledge  of 
sustainable  production.  Farmers  or  other  land 
managers  may  receive  support  for  managing 
pastures  and  meadows  to  preserve  and  enhance 
their  natural  and  cultural  environmental  values, 
with  the  aim  of  maintaining  over  420 000 
hectares annually. 

biodiversity 

and 

(144) Climate Action Progress Report 2024 COM/2024/498. 

(145) EEA, 2024, Pesticides in rivers, lakes and groundwater in 

Europe, Link. 

65 

 
 
Table A9.1:  Key indicators for progress on climate adaptation, preparedness and environment 

(1) The data show the average for the timespan 2006-2023 based on EFFIS - European Forest Fire Information System. 
(2) Scale: 0 (no protection gap) – 4 (very high gap). EIOPA, 2024, Dashboard on insurance protection gap for natural catastrophes. 
(3) van Daalen, K. R. et al., 2024, The 2024 Europe report of the Lancet Countdown on health and climate change: unprecedented 
warming demands unprecedented action. The Lancet Public Health. 
(4) This indicator measures total water consumption as a percentage of the renewable freshwater resources available for a given 
territory and period. Values above 20% are generally considered to be a sign of water scarcity, while values equal or greater than 
40% indicate situations of severe water scarcity. 
(5) European Commission, 2024, seventh Implementation Report from the Commission to the Council and the European 
Parliament on the implementation of the Water Framework Directive (2000/60/EC) and the Floods Directive (2007/60/EC) (Third 
River Basin Management Plans and Second Flood Risk Management Plans). 
(6) For this indicator, the EU average includes figures for the UK under the previous configuration, EU-28. 
(7) European Commission, 2023, EU Bioeconomy Monitoring System dashboards. 
(8) Nitrates can persist in groundwater for a long time and accumulate at a high level through inputs from anthropogenic sources 
(mainly agriculture). The EU drinking water standard sets a limit of 50 mg NO3/L to avoid threats to human health. 
(9) 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. 
Source: Eurostat, EEA. 

66 

Climate adaptation and preparedness:20182019202020212022202320182021Drought impact on ecosystems14.736.24.035.82.583.066.772.76[area impacted by drought as % of total]Forest-fire burnt area (1)2 287       2 287       2 287       2 287       2 287       2 287       [ha, annual average 2006-2023]Economic losses from extreme events93            149          67            46            -           92            24 142       62 981       [EUR million at constant 2022 prices]Insurance protection gap (2)----1.00         1.00         [composite score between 0 and 4]Heat-related mortality (3)2              2              2              2              2              [number of deaths per 100 000 inhabitants in 2013-2022]Sub-national climate adaptation action49            49            49            49            48            47            4144[% of population covered by the EU Covenant of Mayors for Climate & Energy]Water resilience:20182019202020212022202320182021Water Exploitation Index Plus, WEI+ (4)0.40.30.30.20.3-4.54.5[total water consumption as % of renewable freshwater resources]Water consumption691          702          713          472          524          -           [million m3]Ecological/quantitative status of water bodies (5)[% of water bodies failing to achieve good status]Surface water bodies---59%---59%Groundwater bodies---1%---93%Biodiversity and ecosystems:20182019202020212022202320182021Conservation status of habitats (6)22.6-----14.7-[% of habitats having a good conservation status]Common farmland bird index76.680.684.774.978.7-72.274.42000=100Protected areas---1515--26[% of protected land areas]Sustainable agriculture and land use:20182019202020212022202320182021Bioeconomy's added value (7)22 395     22 185     22 026     25 729     634 378     716 124     [EUR million]Landscape features----8              -[% of agricultural land covered with landscape features]Food waste--121118117-[kg per capita]Area under organic farming20.320.420.320.219.97.99-[% of total UAA]Nitrogen balance60.626.1----[kg of nitrogen per ha of UAA]Nitrates in groundwater (8)------[mgNO3/l]Net greenhouse gas removals from LULUCF (9)38 610-     40 513-     43 043-     43 591-     41 218-     -           256 077-     240 984-     [Kt CO2-eq]SwedenEU-27SwedenEU-27SwedenEU-27SwedenEU-27 
 
  
 
FAIRNESS 
ANNEX 10: LABOUR MARKET 

labour  market 

The 
in  Sweden  remains 
resilient, yet with signs of slowing down. The 
labour  market  in  Sweden  continues  to  be  a  top 
performer  in  terms  of  employment  rate,  while  at 
the  same  time  having  one  of  the  highest 
unemployment  rates  in  the  EU.  This  is  due  to 
structural  challenges:  Sweden  suffers  from  skills 
mismatches,  with  labour  shortages  in  certain 
sectors  and  some  groups  experiencing  barriers  to 
work.  Addressing  these  challenges  will  be  key  to 
combat increasing unemployment and to create a 
more inclusive labour market. 

The  labour  market  has  been  resilient  in  the 
recent phase of weak growth but is expected 
to  recover  only  slowly.  The  employment  rate 
slightly decreased in 2024 to 81.9%, but remained 
among  the  highest  in  the  EU.  Sweden  has  fallen 
below  its  2030  employment  target  rate  of  82%, 
despite  being  above  it  in  2022  and  2023.  This 
shows that continued efforts are needed to ensure 
the levels stay above the target until 2030. There 
are  signs  of  a  slowdown,  amid  weak  economic 
growth. In 2024 unemployment rose to 8.4%. This 
is well above the EU average of 5.9%, and among 
the  highest  unemployment  rates 
in  the  EU. 
Although  steadily  decreasing  over  the  last  years, 
the  unemployment  gap  between  those  born 
outside the EU and those born in Sweden remains 
high,  at  13.6  percentage  points  (pps)  (19.3% 
compared  to  5.7%).  The  overall  unemployment 
rate is expected to rise during 2025, before falling 
again in 2026. Labour market slack (146) increased 
2024  (to  13.4%)  compared  to  one  year  before 
(12.3% in 2023), remaining above the EU average 
(11% in 2024). This was mainly due to an increase 
in  the  unemployed  and  people  seeking  work  but 
not immediately available.  

Graph A10.1: Key rates: employment, 
unemployment, long-term unemployment, NEETs 

Source: Eurostat, LFS [lfsi_emp_a, une_rt_a, edat_lfse_20, 
une_ltu_a] 

Although  having  improved  somewhat,  the 
challenges  associated  with 
integrating 
people  born  outside  the  EU  remain.  While  the 
employment  of  those  born  outside  the  EU  was 
above the EU average in 2023 (70.4% vs 67.9%), 
it was significantly below the employment  rate of 
those born in Sweden, at 85%. This represents an 
employment  gap  of  14.6  pps,  considerably  above 
the EU average of 9 pps but improving compared 
to  previous  years.  The  employment  gap  is  even 
wider  between  women  born  outside  the  EU  and 
women  born  in  Sweden  (18.6  pps),  although  the 
employment rate of women born outside the EU is 
also above the EU average (65.2% vs EU: 58.68%). 
Sweden 
highest 
unemployment  rates  among  Member  States  for 
people  born  outside  the  EU  in  2023  (19.3%  vs 
10.8%  EU  average).  Women  born  outside  the  EU 
have an unemployment rate of 20.8% (vs 5.6% of 
women born in Sweden).  

also 

had 

one 

the 

of 

(146) 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 run. It 
encompasses four components: underemployed people 
working part-time, unemployed people, people seeking work 
but not immediately available, and people available to work 
but not seeking. 

The rate of over-qualification among 20–64-
year-olds  is  much  higher  for  those  born 
outside  the  EU.  Of  those,  25.4%  had  a 
qualification that was not required in their field of 
employment,  while  for  those  born  in  Sweden  this 
figure  stood  at  only  10.6%.  This  suggests  entry 
barriers  for  highly  educated  migrants  to  jobs  for 
which they would in principle be well qualified. On 

67 

7576777879808182830246810122009201020112012201320142015201620172018201920202021202220232024%%SEEmployment rate 20-64 (rhs)Unemployment rate 15-74 (lhs)Long-term unemployment rate 15-74 (lhs)NEET rate 15-29 (lhs) 
 
 
 
     
 
 
average,  47.1%  of  25–64-year-olds  in  Sweden 
who were not born in the EU have a high level of 
education (147), while  only 28.3% have lower-level 
qualifications.  Such  under-used  potential  affects 
competitiveness, long-term productivity and social 
cohesion. The Swedish recovery and resilience plan 
(RRP) 
investment  of  approximately 
EUR 400 million  in  upskilling  the  elderly  care 
workforce (of which a significant share are women 
from migrant backgrounds), including by providing 
Swedish language training. 

includes 

long-term  unemployment. 

Certain  population  groups  face  a  higher  risk 
of 
Long-term 
unemployment slightly increased in 2024 (to 1.7% 
vs  1.9%  EU  average),  and  the  Swedish  Public 
Employment  Service  (PES)  predicts  that  it  will 
continue to increase until 2026(148). The increase in 
long-term  unemployment  is  projected  to  affect 
mainly people in a more vulnerable position on the 
labour  market,  such  as  those  without  at  least 
upper-secondary  education,  people  born  outside 
the  EU,  are  older  than  55  years  or  those  with  a 
disability  that  results  in  reduced  work  capacity. 
Among  the  unemployed  in  a  more  vulnerable 
position  on  the  labour  market,  almost  half  lack 
upper  secondary  education,  which  demonstrates 
the  importance  of  upskilling  this  part  of  the  work 
force (see also Annex 12). Furthermore, according 
to the PESs, the number of people unemployed for 
24  months  or  longer  has  begun  to  increase,  and 
now  accounts  for  more  than  half  (56%)  of  all 
long-term  unemployed.  Within  this  group,  nearly 
nine  out  of  ten  are  assessed  to  have  a  weak 
standing  in  the  labour  market  (149).  The  European 
Social  Fund  Plus  (ESF+)  specifically  aims  to  help 
those  who  are  furthest  away  from  the  labour 
market,  including  persons  with  disabilities,  newly 
arrived migrants, young people and the long-term 
unemployed.  

Youth  unemployment  remains  high  but 
increasing  numbers  of  young  people  are 
taking part in education and training. Sweden 
has one of the highest youth unemployment rates 
in the EU, but this figure is at least partly inflated 
by  students  registering  as  unemployed.  On  the 
positive  side,  the  country  also  has  a  very  high 

in 

the 

labour  market 

activity  rate  of  young  people  (aged  15-24) 
(56.8% 
participating 
compared  to  the  EU  41.1%  in  2024).  The  rate  of 
young  people  aged  15-24  not 
in  education, 
employment  or  training  (NEETs)  was  among  the 
lowest in the EU at a rate of 5.5% in 2023 (vs EU: 
9.1%).  This  figure  slightly  increased  by  0.4  pps 
compared  to  2023.  However,  in  2024  at  13,3% 
the  NEET  rate  was  significantly  higher  among 
young persons with disabilities (150).  

Graph A10.2: Labour market outcomes of young 
people - Sweden 

Source: Eurostat, LFS [une_rt_a, edat_lfse_18, lfsi_emp_a, 
edat_lfse_20] 

Although labour shortages are declining, they 
remain  a  pressing  issue  in  certain  sectors. 
The job vacancy rate remains high (2.3% in 2024) 
but has been falling since its peak in 2022, when it 
stood  at  3.1%.  However,  labour  shortages  remain 
high  in  some  sectors.  According  to  CEDEFOP-
EURES  data  (151),  in  2024  the  occupations  most 
requested 
in  the  country  were  professionals 
(25.9%),  associate  professionals  (19.3%),  and 
ICT 
sales  workers 
service 
professionals,  office  associate  professionals  and 
care  workers  are  included  in  each  of  the  above-
(152).  Macroeconomic  skills 
mentioned  groups 

(16.3%). 

and 

(147) i.e. ISCED level 5-8 

(148) Arbetsförmedlingen, 2024, Arbetsmarknadsutsikterna hösten 

2024 

(149) Arbetsförmedlingen, 2024, Arbetsmarknadsutsikterna hösten 

2024 

(150) With some or severe activity limitations (Eurostat 

edat_lfse_39) 

(151) https://www.cedefop.europa.eu/en/tools/skills-online-

vacancies/ela-eures/countries-occupations 

(152) From January to September 2024 

68 

0102030405060708090051015202530200720082009201020112012201320142015201620172018201920202021202220232024%%SEUnemployment rate (lhs)NEET (lhs)In education, training (rhs)Employment rate (rhs) 
 
  
 
mismatch (153) slightly increased in 2024, reaching 
16.4%  (EU:  19.2%).  As  regards  over-qualification, 
in  2023,  13.6%  of  workers  with  higher-education 
qualifications  were  employed  in  occupations  that 
did not require that level of qualification, which is 
well below the EU average that year (21.9%). 

Graph A10.3: Labour market slack - Sweden 

Part-time  employment  is  falling,  but  still 
relatively  high.  17.6%  of  all  employed  people 
are  in  part-time  employment,  which  is  slightly 
above  the  EU  average  (17.2%).  Importantly,  of 
those,  about  22,3%  are  in  involuntary  part-time 
employment.  representing  an  untapped  labour 
reserve,  which  Sweden  would  benefit  from 
harnessing. Increasing this group’s integration into 
the  job  market  could  also  help  reduce  in-work 
poverty,  the  risk  of  which  is  much  higher  in  the 
case of part-time work (155)(see Annex 11).  

of 

accounted 

The  workforce  is  adapting  to  the  green  and 
digital  transitions,  with  a  growing  need  for 
skilled workers in the ICT sector (156). In 2024, 
in  the  country’s  energy-intensive 
employment 
total 
for  2.5% 
industries 
employment, and jobs in the green economy have 
expanded.  Between  2016  and  2021,  employment 
in  the  environmental  goods  and  services  sector 
grew from 2.6% to 3.2% of total employment (EU: 
2.7%). The job vacancy rate in construction, a key 
sector  for  the  green  transition,  is  below  the  EU 
average  (1.7%  vs  3.8%  in  2023)  (for  more  detail 
see Annex 12 on the skills shortages for the green 
transition). The greenhouse gas emission intensity 
of  Sweden’s  workforce  has  improved,  decreasing 
from 9.7 tonnes per worker in 2015 to 7.4 tonnes 
in 2023, far below the EU average of 12.3 tonnes), 
reflecting  good  progress  in  the  green  transition. 
The  ICT  sector  is  well  developed,  and  Sweden 
scores  well  above  the  EU  average  as  regards  ICT 
specialists.  Of  all  employed  people,  8.7%  are  ICT 
specialists,  among  the  highest  in  the  EU  (4.8%). 
6.8% of graduates are ICT graduates, which is also 
above the EU average (of 4.5%). Even so, there is 
a  need  for  even  more  ICT  specialists  (157).  Also 
regarding  digital  skills,  Sweden  is  above  the  EU 
average, both when it comes to basic digital skills 
of  the  general  population  (66.4%  vs.  55.6%)  and 
those  of  workers.  74.9%  of  workers  (age  25-64) 
have  at  least  basic  digital  skills  (which  is  much 
higher  than  the  66.7%  EU  average).  The  Swedish 
RRP  includes  an  investment  of  approximately 
EUR 96 million  to  add  14 900  additional  study 
places  in  higher  vocational  education.  59%  of 
these  are  expected  either  to  be  in  the  fields  of 
data/IT or to contribute to the digital transition. 

(155) (at 12.6% compared to 5.4% for full time work). 

(156) EURES - Countries and occupations | CEDEFOP 

(157) EURES - Countries and occupations | CEDEFOP 

69 

Source: Eurostat, LFS [lfsi_sla_q] 

Real  wages  started  rebounding  in  2024, 
partly  offsetting  the  substantial 
losses 
experienced  in  previous  years.  Nominal  wage 
growth  is  expected  to  reach  3.2%  in  2025,  after 
4.7%  in  2024  and  5.4%  in  2023.  In  2024,  real 
wages  are  set  to  increase  by  2.1%,  following 
significant  declines  in  2022  and  2023  (4.8%  and 
1.8%  respectively).  This  recovery  is  expected  to 
continue  in  2025,  with  real  wages  increasing  by 
1.7% (154). However, expected real wage gains are 
highly  contingent  on  inflation  outturns  and  the 
resilience  of  the  labour  market  in  the  face  of  a 
macro-financial 
challenging 
environment.  According  to  the  forecasts  this  will 
not  be  sufficient  to  fully  recoup  the  purchasing-
power  losses  of  2022  and  2023.  In  recent  years, 
growth  in  unit  labour  costs  (ULCs)  has  generally 
been  in  line  with  most  other  EU  Member  States 
(4.2% in 2022, 6.9% in 2023, 3.7% in 2024), and 
is set to remain relatively low at 1.9% in 2025. 

international 

(153) The macroeconomic skills mismatch indicator measures the 

dispersion of employment rates across skill groups 
(represented by qualification levels, with ISCED 0-2 low; 3-4 
medium and 5-7 high). Source: F2 own calculations 

(154)Based on the European Commission Autumn 2024 economic 

forecast. 

05101520252009-Q12010-Q12011-Q12012-Q12013-Q12014-Q12015-Q12016-Q12017-Q12018-Q12019-Q12020-Q12021-Q12022-Q12023-Q12024-Q1% of extended labour forceSEUnemployment rateAvailable but not seekingUnderemployedSeeking but not available 
       
 
 
ANNEX 11: SOCIAL POLICIES 

Social  protection  in  Sweden,  traditionally 
very  high,  continues  to  steadily  deteriorate, 
in  particular  for  vulnerable  groups,  ever 
since  the  start  of  records  in  2004.  Both  the 
rate of people at risk of poverty or social exclusion 
(AROPE) in general and the rate of children at risk 
of  poverty  or  social  exclusion  has  increased,  as 
has  income  inequality.  People  at  risk  of  poverty 
are also more likely to live in overcrowded housing 
and  to  spend  more  than  40%  of  their  household 
income  on  housing.  Addressing  these  challenges 
will 
and 
contribute 
competitiveness. 

inclusive 

growth 

to 

in 

social 

Sweden 

situation 

The 
is 
deteriorating,  although  it  remains  above  the 
EU  average.  The  AROPE  rate  stood  at  17.5%  in 
2024,  still  below  the  EU  average 
(21.3%). 
However, the gap is narrowing, having been nearly 
twice as high in 2015. The rate is mainly driven by 
an  increase  of  the  severe  material  and  social 
deprivation rate, which has more than tripled since 
2016  (from  0.7%  in  2016  to  3%  in  2024).  This 
increase,  while  still 
represents  a  significant 
remaining  among  the  lowest  rates  in  the  EU,  and 
below  EU  average  of  6.8%.  The  depth  of  poverty 
(measured by the risk of poverty gap) increased by 
2.5 pps  in  2023  compared  to  the  previous  year 
and  stood  above  EU  average  for  the  first  time 
(24%  vs  EU  average  23%).  The  impact  of  social 
transfers (excluding pensions) on poverty reduction 
has  been  on  a  downward  trend  (albeit  with  some 
fluctuations)  since  2014.  In  2023,  it  was  still 
above EU average (36.9% vs 34.7% respectively), 
but  down  7.6 pps  from  2021,  and  down  30 pps 
since  2005.  The  Swedish  European  Social  Fund 
Plus (ESF+) programme will invest around EUR 21 
million  to  help  reduce  the  risk  of  financial 
vulnerability and contribute to an inclusive society. 

Increased efforts are needed to maintain the 
national  poverty  reduction  target  by  2030. 
The  absolute  number  of  people  at  risk  of  poverty 
or social exclusion has decreased from 1 879 000 
people  in  2019  to  1 843  000  in  2024.  This  is  a 
decrease  of  36 000  people,  compared  to  the 
national  target  of  reducing  the  number  of  people 
at  risk  of  poverty  or  social  exclusion  by  15 000 
people  by  2030.  While  Sweden  looks  likely  to 
achieve  its  relatively  modest  2030  target,  efforts 
will  need  to  be  intensified  to  ensure  sufficient 
progress. 

Vulnerable  groups  are  particularly  affected 
by  poverty  and  social  exclusion.  In  particular, 

people who are born outside the EU have a much 
higher  risk  of  poverty  or  social  exclusion,  with  a 
gap  of  25.5 pps  compared  to  those  born  in 
Sweden  (38.3%  vs  12.8%  respectively).  This  is 
compared  to  an  EU  average  gap  of  20.9 
percentage  points  (39.2%  for  those  born  outside 
of  the  EU  vs  18.3%  for  people  born  in  Sweden). 
The  indicators  also  show  that  people  with  a  low 
level  of  education  (158)  also  have  a  higher  risk  of 
poverty or social exclusion compared to those with 
a  higher  level  of  education  (159)  (30%  vs  11.5% 
risk  of  poverty  or  social 
respectively).  The 
(aged 
exclusion  for  persons  with  disabilities 
sixteen years or over) is also slightly above the EU 
average  (29%  vs  28.8%),  and  significantly  higher 
than  the  AROPE  rate  for  persons  without  any 
disabilities (15.1%). 

Graph A11.1: Share of people at risk of poverty or 
social exclusion (AROPE) (%) for different 
population groups 

Source: Eurostat [ilc_peps01n, ilc_peps04n, ilc_peps06n, 
hlth_dpe010], EU-SILC. 

Income  inequality  continues  to  rise.  Sweden 
has  gone  from  being  one  of  the  most  financially 
equal  countries in the EU, to being around the EU 
average.  In  2023,  the  income  of  the  richest  20% 
of the population was 4.73 times higher than that 
of the poorest 20% (EU: 4.72), which is the highest 
level  since  2004.  This  is  largely  due  to  the  fact 
that  income  from  capital  has  become  more 
important  as  a  share  of  total  household  income, 
strongly 
while  at 
concentrated among those with higher incomes. In 
recent years income tax relief  related to work tax 
credit  reforms  and  income  tax  decreases  have 
either  been  general  or  aimed  at  lowering  the 
highest  marginal  tax  rates.  The  wage  gap  in 
Sweden  remains  the  lowest  in  the  OECD  and  the 
distribution of income from work has even become 

time  being 

same 

the 

(158) ISCED levels 0-2. 

(159) ISCED levels 5-8. 

70 

10152025303540452015201620172018201920202021202220232024AROPEAROPE ChildrenAROPE People born outside of the EUAROPE People with a disabilityAROPE People with a low level of education 
 
  
 
 
 
more equal in recent decades, due to more people 
being  employed.  In  this  respect,  Sweden  differs 
from  many  other  EU  countries,  where  increasing 
differences  in  labour  income  largely  accounts  for 
the development of inequality (160). 

poverty,  financial  assistance  programmes  and 
subsidies  are  in  place  to  mitigate  the  impact  of 
high  energy  prices,  including  subsidies  for  energy 
efficiency  improvements  and  the  protection  from 
disconnection for vulnerable households. 

The risk of poverty or social exclusion among 
children  has  increased.  Between  2022  and 
2023, the AROPE rate for children rose by 1.7 pps, 
reaching  21.6%.  Risks  are  more  pronounced  for 
children  in  precarious  family  situations,  and  for 
children  who  have  recently  migrated  to  Sweden. 
The  relatively  modest  child  poverty  reduction 
target  for  2030  (5  000)  has  been  already 
achieved,  opening  room  for  further  efforts.  To 
mitigate the impact of poverty on children, Sweden 
is  implementing  the  European  Child  Guarantee 
(ECG)  according to its action plan of March 2022. 
The  2024  biennial  implementation  report  shows 
progress  has  been  made  in  some  areas.  For 
example, a scheme to help disadvantaged children 
with  homework,  the  development  of  a  national 
health programme  for  children  and  young  people, 
parenting  support  and  expanding  the  home  visit 
programme among younger children in areas with 
socioeconomic  challenges.  The  implementation  of 
the  ECG  is  supported  by  the  ESF+,  including 
through measures preventing early school drop out 
and  providing  organised  extracurricular  activities 
for vulnerable children. 

Energy  poverty  in  Sweden  is  relatively  low. 
However, recent energy crises have had a negative 
impact  on  energy  poverty.  In  2023,  5.9%  of  the 
population  reported  being  unable  to  keep  their 
homes  adequately  warm,  which  is  lower  than  the 
EU  average  of  10.6%,  but  a  significant  increase 
compared to only 1.7% in 2021. Structural issues 
such  as  leaks,  damp,  or  rot  affected  4.8%  of  the 
population,  showing  an  improvement  of  2.3  pps 
from 2021, standing well below the EU average of 
15.5%.  Sweden  is  addressing  energy  poverty 
through  a  combination  of  social  welfare  policies, 
low-income 
including  financial  assistance  for 
households  and  housing  allowances.  Despite  the 
lack  of  a  national  definition  of  energy  poverty, 
Sweden’s  social  policies  provide  substantial 
support to vulnerable consumers. However, energy 
poverty  remains  an  issue  due  to  inflation  and 
rising  electricity  prices.  While  Sweden  does  not 
have specific national objectives to reduce energy 

(160) Ekonomisk ojämlikhet i Sverige, Översikt av fakta och 
framtidsutmaningar. Finanspolitiska rådet, 2024. 

Some  vulnerable  groups  are facing  potential 
transport poverty risks. The share of people at 
risk of poverty who cannot afford a car was higher 
than  the  EU  average  (at  18%  in  2023,  compared 
to 15.9% EU). This suggests that transport poverty 
risks become more  pronounced  among  vulnerable 
income groups. This is especially the case in rural 
areas  and  the  northern  sparsely  populated  areas 
as  travel  distances  are  greater,  and  public 
transport  is  sometimes  less  available  due  to  the 
vast  distances.  Moreover, 19.6%  of  people  at  risk 
of  poverty  spend  a  very  high  amount  on  private 
transport  fuels  (defined  as  twice  the  national 
median),  above  the  EU  average  of  18.3%.  At  the 
same  time  reliance  on  cars  for  inland  transport 
has fallen over time, from 83.8% in 2011 to 81% 
in 2022. 

Graph A11.2: Housing situation (housing cost 
overburden and overcrowding rate) 

Source: Eurostat [ilc_lvho05a, tessi163, ilc_lvho16], EU-SILC. 

High  housing  costs  negatively  impact  living 
standards.  In  2023,  10.9%  of  the  population 
faced  housing  costs  above  40%  of  their  total 
disposable  household  income,  which  is  above  the 
EU  average  of  8.8%.  For  people  experiencing 
poverty risks, this housing cost overburden rate is 
among  the  highest  in  the  EU,  driven  by  limited 
access  to  affordable  housing.  The  housing  cost 
overburden  rate  for  this  group  increased  by 
4.6 pps  from  2022  to  2023,  reaching  47.4%, 
which  is  significantly  above  the  EU  average  of 
33.5%.  Housing  cost  overburden 
rates  are 
considerably  higher  in  cities  than  in  rural  areas 
(13.2% vs 8.2%). In 2023, 16.4% of people lived in 
an overcrowded household (EU: 16.8%). For people 
at  risk  of  poverty  this  share  rose  to  40.8%, 
standing  high  above  the  EU  average  of  29.7%.  A 

71 

05101520253035404571217222732374247522015201620172018201920202021202220232024Overcrowding rateOvercrowding rate for people at risk of povertyOvercrowding rate for peole born outside of the EUHousing cost overburdenHousing cost overburden for people at risk of poverty 
 
  
was  appropriate  but  only  partially  sufficient  to 
mitigate the situation. 

from 

house 

supply 

despite 

growth, 

constraints 

price-to-income 

Overall  Housing  affordability  remains  an 
issue  as  supply  struggles  to  respond  to 
recent 
population 
improvements..  While  prices  partially  reflect 
fiscal  incentives  for  mortgage  debt,  they  also 
amid 
emerge 
demographic  pressure,  in  particular  in  the  three 
largest  cities.  House  price  growth  exceeded 
household  income  growth  over  a  long  period,  but 
affordability  has  improved  more  recently.  The 
standardised 
ratio 
increased  from  2015  to  2021  (+12%),  raising 
concerns about the affordability of housing. It has 
eased  since  then  and  reverted  to  its  2015  level, 
which  is  still  13%  above  its  long-term  average, 
implications  for  the 
with  possible  structural 
domestic  economy.  Considering 
the  cost  of 
mortgages,  the  borrowing  capacity  of  households 
worsened  slightly  over  the  past  decade  but 
remains  higher  than  in  most  other  EU  countries. 
However,  this  is  underpinned  by  the  very  low 
maturity  of  mortgage  loans  with  very  limited 
repayments  of  the  principal  loan.  Having  rather 
large  rental  market,  the  ratio  of  new  rents  to 
incomes  increased  only  marginally  over  the  last 
decade.  The  pace  of  dwelling  completions  has 
improved  since 
the  2010s,  but  still  barely 
manages  to  keep  pace  with  dynamic  population 
growth  (+10%  over  the  last  ten  years).  Amid  a 
general  market  downturn,  residential  building 
permits  have  decreased  substantially  since  2021, 
which  could  indicate  limited  new  housing  supply 
looking ahead. 

much  larger  share  of  people  born  outside  the  EU 
also  live  in  overcrowded  household  compared  to 
those born in Sweden (36.7 vs 9.7% respectively). 
The Swedish recovery and resilience plan (RRP) has 
invested EUR 296 million to increase the supply of 
new  rental  dwellings  with  a  lower  rent  to  relieve 
the  housing  shortage.  Among  the  surveyed  in 
2023(161),  9.1%  reported  having  faced  housing 
difficulties  at  least  once  in  the  past,  with  this 
percentage  being  significantly  higher  for  AROPE 
population  (16.8%).(162)  According  to  the  latest 
available  data  from  service  providers,  a  total 
facing 
number  of  27  383  people  were 
homelessness in Sweden in 2023 (163). The country 
is  implementing  a  National  Strategy  to  Combat 
Homelessness  2022-2026  that  introduces  the 
‘Housing First’ method nationwide (164). 

increases 

requirements 

rate  periods,  and 

House  price 
increases  have  moderated 
following  years  of  high  price  growth.  House 
prices  have  increased  by  23%  since  2015  in 
nominal terms. After years of high increases, they 
started to moderate in 2022 due to higher interest 
rates,  with  mortgage  interest  rates  increasing 
from  1.4%  in  2021  to  4.3%  in  2023.  The 
prevalence  of  long  mortgage  maturities,  short-
limited  mortgage 
fixed 
amortisation 
the 
sensitivity  of  households’  borrowing  capacity  to 
changes in interest rates. In 2023, nominal house 
prices  dropped  by  5.3%.  They  were  estimated  to 
be  overvalued by  15-20%, which is roughly  5 pps 
the  previous  year.  House  prices 
less 
continued  to  fall in  2024,  albeit  at  a  slower  pace 
(0.8%  year-on-year  in  Q2-2024).  At  the  same 
time,  continued  house  price  moderation  seems 
unlikely as supply constraints remain, incomes are 
growing  and  borrowing  costs  are  declining  while 
the 
is  hardly  an 
rental  market 
alternative  for  housing  acquisition.  The  impact  of 
the  ongoing  adjustment  was  also  significant  for 
the  construction  sector,  with  a  fall  in  obtained 
building permits of 21.6% and 55.1% in 2022 and 
2023,  respectively.  In  terms  of  financial  stability, 
in  February  2024,  the  ESRB  concluded  that  the 
residential real estate market in Sweden was liable 
to  high  risks  and  the  macroprudential  policy  mix 

regulated 

than 

(161) EU-SILC (The EU statistics on income and living conditions 

module on housing difficulties) 

(162) Eurostat, data code ilc_lvhd01 

(163) Kartläggning av hemlösheten 2023, Socialstyrelsen 2024 

(164) The Government's strategy to combat homelessness 2022–

2026 - Regeringen.se 

72 

 
 
 
ANNEX 12: EDUCATION AND SKILLS 

The  Swedish  school  system  is  recording 
worsening  educational  outcomes  and  is  not 
able to sufficiently compensate for students’ 
diverse  backgrounds.  This  is  evidenced  notably 
by  the  general  decline  in  basic  skills  since  2018, 
the  high  incidence  of  pupils  leaving  lower  and 
upper  secondary  education  without  sufficient 
grades,  and  the  strong 
influence  of  socio-
economic  and  migrant  background  on  education 
outcomes.  Ultimately,  this  may  hamper  human 
capital 
future 
and 
competitiveness.  Teacher  shortages  represent  a 
key  challenge  impacting  the  overall  quality  of 
education.  Steps  are  being  taken  to  ensure  that 
vocational  education  and  training  (VET)  better 
meet  the  needs  of  the  labour  market,  and  to 
increase interest in STEM careers.  

formation 

Sweden’s 

than 

their 

European 

Education outcomes are declining, hampering 
skills  development  and  competitiveness. 
According to PISA 2022, Swedish students perform 
better 
peers  with 
underachievement rates slightly lower than the EU 
average in mathematics (27.2% vs EU average of 
29.5%),  reading  (24.3%  vs  EU  average  of  26.3) 
and  science  (23.7  vs  EU  average  of  24.2%). 
However,  underachievement  has  increased  since 
2018,  in  all  three  domains,  reversing  the  positive 
trend  observed  between  2012  and  2018.  The 
performance drop is among the largest in the EU: 
8.4 percentage  points 
in  mathematics, 
5.9 pps  in  reading,  and  4.7 pps  in  science (165). 
While  the  share  of  top  performers  is  still  higher 
than  the  EU  average  (7.9%)  it  has  decreased  in 
both  mathematics  (by  2.6 pps  to  10%)  and 
reading  (by  3.1 pps  to  10.2%).  At  7.2%  in  2024, 
early  leaving  from  education  and  training  is 
decreasing and is below the EU-level target of 9% 
but  remains  higher  for  those  with  a  migrant 
background (12% vs 5.9%) (166). 

(pps) 

Teacher  shortages  put 
the  quality  of 
education  at  risk.  More  than  a  third  of  school 
principals  report  shortages  or  poorly  qualified 
teaching  and  assisting  staff.  In  2023/2024,  only 
71.5%  of  teachers  in  compulsory  schools  were 
qualified  in  at  least  one  of  their  subjects,  and  in 
Disadvantaged 
84.2%. 
upper-secondary 
schools (167)  have  a  lower  share  of  qualified 

teachers  (81%  vs  91%  for  advantaged  schools). 
The  ageing  of  the  teacher  workforce  combined 
with  the  low  attractiveness  of  the  profession  risk 
further aggravating shortages. More than one third 
of teachers in Sweden are aged 50 and above (168) 
and  will  retire  in  the  next  decade.  The  Swedish 
National Agency for Education’s expects that more 
than  10 000  additional 
teachers  and  early 
childhood  education  and  care  (ECEC)  staff  will  be 
needed  by  2038.  Teachers  are  facing  heavy 
administrative  burden  and  challenging  working 
the 
conditions,  which 
increase 
attractiveness  of  the  profession.  To 
quality  of  teachers’  education,  Sweden  is  working 
to  increase  admission  requirements,  strengthen 
the  initial  teacher  education  of  subject  teachers, 
and  focus  more  on  subject  knowledge,  cognitive 
science and pedagogy in educational content.  

negatively 

affect 

from 

disadvantaged 

Students  with  a  migrant  or  disadvantaged 
background  are  more  likely  to  underachieve 
in  basic  and  digital  skills.  According  to  recent 
analysis,  the  Swedish  school  system  is  facing 
challenges  to  compensate  for  students’  diverse 
conditions  and  backgrounds.  In  2022,  4  out  10 
students 
backgrounds 
(44.4%) did not reach a minimum proficiency level 
in  mathematics.  While  this  is  below  the  EU 
average  of  48.0%,  it  represents  a  major  increase 
of  11.7 pps  since  2018,  when  it  stood  at  32.8%. 
Students  with  a  migrant  background  more  often 
have a low socio-economic status (48.2% vs 25% 
for  students  in  general),  and  their  performance 
gap  compared  with  native-born  students 
is 
significant,  particularly  in  mathematics.  Half  of 
foreign-born students (52.3%) and four out of 10 
native-born  students  with  parents  born  abroad 
(40.3%) do not reach a minimum proficiency level 
in mathematics. Their underachievement rates are 
among  the  highest  in  the  EU,  while  those  of 
students  without  a  migration  background 
is 
lower  at  20.1% (169).  Moreover, 
significantly 
students  with  a  migrant  background  face  more 
challenges in achieving the threshold for essential 
digital literacy skills compared to their native-born 

statistically significantly below the socio-economic status 
of the country’s/economy’s mean socio-economic status. 
(168)OECD (2024), Education at a Glance 2024 - Country notes: 

Sweden. 

(165)OECD (2023), PISA 2022 Results (Volume I). 
(166)Eurostat edat_lfse_02. 
(167)According  to  the  OECD,  disadvantaged  schools  are  those 
is 
where  the  socio-economic  profile  of  the  school 

(169)The  gap  between  students  without  migrant  background 
and  foreign-born  students  stands  at  32.2 pps,  which 
shrinks to 20.6 pps for native-born students with foreign-
born parents. 

73 

 
 
 
 
 
 
 
peers (170).  One  in  five  students  in  Sweden  has  a 
the  highest 
migrant  background,  one  of 
proportions  in  the  EU  (21.3%)  and  three  out  of 
four do not speak the language of tuition at home.  

Graph A12.1: Underachievement trends in 
mathematics, reading and science in Sweden. 
PISA 2012 to 2022 (%) 

Source: OECD 

Enhancing  Swedish 
language  acquisition 
from  an  early  age  is  essential  for  greater 
school success. However, children with a migrant 
background  participate  less  in  ECEC  than  native-
born  children  and 
is  most 
children  born  abroad (171). 
pronounced 
Moreover, ECEC staff qualification is low: in 2022, 
only  40%  of  ECEC  staff  were  qualified  ECEC 
teachers. 

this  difference 

for 

Progression  to  upper  secondary  school  is  a 
challenge for a significant share of students, 
in  particular  for  those  from  disadvantaged 
backgrounds.  Students’  grades  are  the  main 
instrument for selection and admission into upper 
secondary and higher education. In 2022, 15% of 
all the students had compulsory school grades too 
low  to  qualify  for  the  national  upper  secondary 
education programme. The problem is partly linked 
to  the  decline  in  student  performance.  However, 
disparities in grade attributions can also be noted 
between schools, as the way grades are attributed 
teachers,  with 
schools  and 
varies  across 
independent  schools  being  on  average  more 

(170)As reported in the International Computer and Information 
Literacy  Study  (2023),  Sweden  displays  significant  gaps 
(34.8 points), compared to the EU average (28.5), leaving 
migrant students below the threshold for essential digital 
literacy skills (Level 2). 

(171)The  participation 

rate  of  native-born  children  for 
three year-olds  is at  96%, while  it  is at  75%  for  children 
born  abroad  and  90%  for  children  with  two  foreign-born 
parents. 

generous  in  their  grading (172).  In  February  2025, 
an  inquiry  presented  proposals  to  address  grade 
inflation  and  ensure  that  grades  fairly  reflect 
pupils’  knowledge,  aiming  to  reduce  the  share  of 
those  leaving  education  without  sufficient  grades 
and to give more equal chances to continue to the 
next level of education (173). Greater heterogeneity 
in  the  classrooms  could  also  help  address  the 
learners  with  a 
educational  disadvantage  of 
migrant background. While the PISA isolation index 
is low for disadvantaged students (0.13) compared 
to  the  EU  average,  for  students  with  a  migrant 
background  it  is  one  of  the  highest  in  the  EU 
(0.22), which shows that they are more likely to be 
concentrated  in  certain  schools.  Disadvantaged 
schools  also  struggle  more  with  the  shortage  of 
teachers.  Moreover,  students  with 
qualified 
disadvantaged  background  are  underrepresented 
in independent schools, where pupils are found to 
have  better  chances  of  qualifying  for  upper 
secondary school (174). 

Several  measures  are  in  place  to  facilitate 
access  to  analogue  learning.  Since  July  2024, 
students  in  compulsory  school,  upper  secondary 
school  and  municipal  adult  education  have  the 
right  to  free  access  to  textbooks  and  other 
learning  materials.  In  2025,  further  amendments 
to  the  Education  Act  have  been  introduced  to 
ensure  that  all  pupils  from  preschool  classes  to 
upper secondary school will have access to staffed 
school  libraries (175).  In  2024,  artificial  intelligence 
was  introduced  as  a  subject  in  upper  secondary 
schools  and municipal  adult  education,  to  support 
students  in  developing  knowledge  of  its  core 
concepts and applications. 

Challenges  related  to  the  labour  market 
relevance of VET remain. The share of learners 
enrolled  in  vocational  programmes  out  of  total 
upper secondary learners is low, at 35.5% in 2022, 
and below the EU  average (49%). Although it has 
decreased since 2021, Sweden still has one of the 
highest  employment  rates  for  young  people 
recently graduated from VET, at 86.2%, above the 
EU average of 81%. In 2023, 65.7% of recent VET 

(172)Swedish  National  Agency 

(2023): 
Assessment of the situation in the school system 2023; and 
(2019):  Analyses  of  equal  grading  between  student  groups 
and schools. 

for  Education 

(173)  An equivalent grading system - Regeringen.se 
(174)Swedish  National  Agency  for  Education 

(2023)  - 

Assessment of the situation in the school system 2023. 
(175)  EUR 19  million  is  to  be  earmarked  for  this  purpose  for 

2025, followed by EUR 38 million annually. 

74 

01020302012201520182022%Underachievement trends in mathematics, reading and science in Sweden. PISA 2012 to 2022 (%)MathematicsReadingScience 
  
 
 
is  due 

graduates  had  work-based  learning  experience, 
above  the  EU-level  average  of  64.5%.  The  VET 
system  faces  a  high  risk  of  skills  mismatch 
between  labour  market  needs  and  graduates’ 
qualifications.  This 
to  decentralised 
provision and learners’ choice influencing the offer 
of  VET  programmes.  Sweden  has  made  recent 
changes  to  combat  this  and  consider  labour 
market  needs  during  the  planning,  dimensioning 
and offer of upper secondary education, to ensure 
that  skills  supply  meets  demand  in  the  regional 
and  national  labour  market.  Municipalities  must 
two  other 
also  collaborate  with  at 
municipalities  on  planning,  streamlining  and 
offering  a  specific  education  programme.  The 
Swedish  recovery  and  resilience  plan  has  also 
invested in VET with more than 68 000 new places 
created in regional adult vocational education. 

least 

Tertiary  attainment  is  high,  but  the  number 
of STEM graduates falls short of meeting the 
growing  demand.  Between  2014  and  2024,  the 
share of young people between 25 and 34 with a 
tertiary  qualification  increased  by  8.4 pps.  At 
54.4%,  Sweden  is  well  above  the  EU  average  of 
44.2%,  and  the  EU-level  target  of  45%.  The  level 
varies within the country, leading to imbalances in 
the  availability  of  highly  qualified  people  across 
regions: it is lower in the northern regions (176) and 
in  rural  areas  (36.5%),  and  much  higher  in  cities 
(67.7%) (177). Students’ educational attainment and 
likelihood  of  successfully  completing  their  studies 
depends  on  parental  educational  background (178). 
While  there  is  interest  in  STEM  among  young 
people in Sweden, it needs to increase to meet the 
increasing  demand  in  STEM  fields  linked  to  the 
green and digital transitions. According to a recent 
report  by  UKÄ,  by  2040  Sweden  will  need  more 
enrolments 
chemistry 
engineering 
programmes.  In  2022,  the  share  of  students 
enrolled  in  STEM  subjects  out  of  total  tertiary 
enrolments in Sweden was 28.4%, against the EU 
average  of  27.1%.  Although  Sweden’s  population 
has  a  good  level  of  digital  skills (179),  Swedish 

and 

in 

(176)Eurostat: edat_lfse_04. 
(177)Eurostat: edat_lfs_9913. UKÄ points to regional disparities 

in the transition to higher education.  

(178)61%  of  students  with  at  least  one  parent  with  tertiary 
attainment  successfully  completed  their  tertiary  studies 
within  three  years  of  the  theoretical  end  of  the 
programme,  while  only  55%  of  students  whose  parents 
had  less  than  upper  secondary  education  did  so.  OECD 
Education at a Glance 2024 - Country note: Sweden. 

(179)In  2023,  66.4%  of  people  between  the  ages  16  and  74 

had at least basic digital skills. 

companies  report  that  it  is  difficult  to  recruit  ICT 
specialists, while the demand remains strong (180). 
In  2022,  the  share  of  students  enrolled  in  ICT 
subjects was in line with the EU average (5.1% vs 
EU  average  of  5.2%),  31.7%  of  whom  were 
women. The share of STEM PhD enrolments (181) in 
2022  was  43%.  The  number  of  new  doctoral 
graduates  in  STEM  has  gradually  declined  since 
2017 (-46.3% points) (182).  

Sweden  is  taking  steps  to  boost  studies  in 
STEM  fields.  In  February  2025,  the  government 
presented  a  STEM  strategy  aimed  at  providing 
people with solid skills and increasing the number 
of  students  in  STEM  in  higher  education,  higher 
vocational  education  and  upper 
secondary 
education. It sets objectives to increase the share 
of  pupils  studying  in  science  and  technology 
programmes  by  2035  and  that  at  least  15%  of 
students  achieve  high  results  in  mathematics  in 
PISA  by  2033.  A  delegation  will  be  now  looking 
into  how  to  increase  the  proportion  of  women  in 
STEM. 

The  development  of  green  competences  and 
skills  is  encouraged  across  all  educational 
levels  and  sectors.  Eighth  grade  (average  age 
14-15)  students’  knowledge  of  sustainability  is 
one  of  the  best  among  the  EU  countries,  but 
strongly  affected  by  gender  and  parents’ 
educational  attainment (183).  However,  only  32.2% 
of  schools  report  that  nearly  all  eighth-grade 
students  have  participated  in  activities  related  to 
environmental  sustainability 
(EU-17  average: 
48%). Learning for sustainability features explicitly 
in  higher  education  curricula  and  is  required  for 
some  degrees.  Half  of  VET  upper  secondary 
programmes  also  contain  learning  content  on 
sustainability related to the relevant profession. 

is 

crucial 

development 

Skills 
for 
competitiveness,  resilience  and  fairness, 
especially  in  light  of  skills  shortages  and 
increased unemployment. Although the Swedish 
low 
labour  market 
features 
macroeconomic 
labour 
shortages  persist  in  highly-skilled  occupations 

skills  mismatches, 

relatively 

(180)They estimate that the number of ICT specialists will have 

to increase by 18 000 annually until 2028. 

(181)  As a share of total PhD enrolments. 
(182)  See also Annex 3 - Innovation to business. 
(183)Children  whose  parents  have  a  high  level  of  educational 
attainment score 108.5 points higher than those from low 
education backgrounds (EU-17 average: 76.3). 

75 

 
 
 
such  as  ICT  professionals  and  care  workers. 
Sweden  has  one  of  the  highest  unemployment 
rates  for  people  with  low  levels  of  qualifications 
(24.6%  vs  11.9%  EU  average),  and  among  the 
long-term unemployed (12 months or more) those 
with  short  educational  background  are  over-
represented (184),  suggesting  a  need  to  upskill  the 
labour force to combat rising unemployment. With 
the  EU's  Technical  Support 
support 
the 
Instrument, 
governance  of 
improve 
cooperation  in  the  area  of  skills  and  to  address 
skills  mismatches  in  a  coordinated  and  efficient 
way. 

its  skills  system,  to 

strengthening 

Sweden 

from 

is 

skills 

The  development  of  green 
is 
particularly  critical  for  the  green  transition. 
There are major ongoing investments and focus on 
the  green  transition  in  the  north  of  Sweden,  with 
new  companies  launching  in  the  region  and 
existing  industries  rebuilding  and  expanding  the 
production 
battery 
fossil-free 
steel, 
manufacturing  and 
fossil-free  mining.  This 
transition  will  bring  many  new  jobs  to  the  north, 
and  a  large  part  of  these  will  be  knowledge-
intensive and require highly qualified skills. 

of 

the  EU,  significantly  above  the  EU  average  of 
39.5% (187).  Participation increased  from  58.8% in 
2016  and  this  means  that  Sweden  already  has 
achieved  its  2030  adult  learning  target  of  60% 
participation.  

While all demographic groups had among the 
highest  adult  learning  rates  in  the  EU, 
participation  varied  by  demographic  group. 
For example, those with higher levels of education 
participated  more 
those  with 
(78.6%) 
medium  (62.9%)  or  lower  levels  of  education 
(47.1%).  Those  living  in  cities  also  had  higher 
levels of participation (70.2%) than those living in 
towns and suburbs (64.2%) or rural areas (62.2%). 
Younger  workers  (25-34  years)  had  higher  levels 
(70.8%)  compared  to  other  age  groups  (35-44: 
70%; 45-54: 68.4%; 55-64: 55.7%). 

than 

Graph A12.2: Employment rate by educational 
attainment (annual) - Sweden 

There is a broad need for green skills across 
all  skill  levels.  In  2024,  labour  shortages  were 
reported  in  several  occupations  requiring  specific 
skills  related  to  the  green  transition,  including 
insulation 
garbage  and 
workers,  and  plumbers  and  pipe  fitters (185). 
However, 85% of the Swedish public believes that 
they have the necessary skills to contribute to the 
green  transition,  the  highest  share  in  the  EU  and 
significantly above the EU average of 54% (186). 

recycling  collectors, 

Sweden  has  a  record  high  participation  in 
adult learning. The high level of adult learning is 
likely  partly  due  to  the  long-established  tradition 
of adult education in Sweden, with broad access to 
folk  high  schools  and  study  associations,  etc.  In 
2022,  66.5%  of  the  adult  population  participated 
in  adult  learning,  the  highest  participation  rate  in 

(184)Arbetsförmedlingen: Arbetsmarknadsutsikterna hösten 

2024. 

(185)European Labour Authority, 2025: EURES Report on labour 
shortages and surpluses 2024, based on data from EURES 
National  Coordination  Offices.  Skills  and  knowledge 
requirements  align  with  the  ESCO  taxonomy  on  skills  for 
the  green  transition,  with  examples  analysed  using  the 
ESCO green intensity index. 

(186)Special  Eurobarometer  527:  Fairness  perceptions  of  the 

green transition. 

(1) Employment rates ages 20-64 (% of population) 
Source: Eurostat, LFS [lfsa_ergaed] 

(187)Data in this paragraph from the Adult Education Survey 
2022, special extraction excluding guided-on-the-job 
training. 

76 

30405060708090100200720082009201020112012201320142015201620172018201920202021202220232024% population 20-64SEHigh skilledMedium skilledLow skilled 
 
  
 
ANNEX 13: SOCIAL SCOREBOARD 

Table A13.1:Social Scoreboard for Sweden 

(1) Update of 5 May 2025. 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 2025 for details on the 
methodology (https://employment-social-affairs.ec.europa.eu/joint-employment-report-2025-0). 
Source: Eurostat 

77 

66,57,266,46,34,04,3481,98,41,7118,617,520,940,622,910,657,72,2Critical situationTo watchWeak but improvingGood but to monitorOn averageAdult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Equal opportunities and access to the labour marketSocial Scoreboard for SwedenBest performersBetter than averageEarly leavers from education and training(% of  the population aged 18-24, 2024)Young people not in employment, education or training(% of the population aged 15-29, 2024)Gender employment gap(percentage points, population aged 20-64, 2024)Income quintile ratio (S80/S20, 2024)Dynamic labour markets and fair working conditionsSocial protection and inclusionShare of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2023)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2024)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2024)Self-reported unmet need for medical care (% of the population aged 16+, 2024)Disability employment gap (percentage points, population aged 20-64, 2024)Housing cost overburden (% of the total population, 2024)At risk of poverty or social exclusion (AROPE) rate (% of the total population, 2024)Employment rate(% of the population aged 20-64, 2024)Unemployment rate(% of the active population aged 15-74, 2024)Long term unemployment(% of the active population aged 15-74, 2024)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2023)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2024) 
 
 
 
  
 
 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 

of 

and 

treatable 

Sweden’s  health  system  performs  well,  with 
high  life  expectancy  at  birth  linked  to  low 
levels 
preventable 
mortality. However, the country continues to face 
(general 
of  healthcare  workers 
shortages 
practitioners  and  advanced  practice  primary  care 
nurses 
regions)  and  an  uneven 
geographical  distribution  of  healthcare  resources. 
These  issues  are  countered  by  the  country’s 
relatively sound funding of the health system. 

in  certain 

Life expectancy at birth in Sweden is among 
the highest in the EU, after rebounding above 
its  pre-COVID-19  level  in  2023.  There  is  a 
gender gap, however, with women expected to live 
3.3 years longer than men. That said, women can 
expect  to  live  2.2  years  less  than  men  in  good 
health. In 2022, the leading causes of death were 
cardiovascular  diseases  followed  by  cancer  and 
respiratory  diseases.  The  Swedish  government 
announced an updated national dementia strategy 
on  23  January  2025,  covering  healthcare,  dental 
care  and  social  services  (188).   Compared  to  other 
EU  countries,  Sweden  had  very  low  rates  of 
mortality from preventable and treatable causes in 
2022.  This  indicates  that  the  public  health  and 
health  systems  are  highly  effective.  The  low  rate 
of preventable mortality is largely due to low rates 
of  premature  deaths  from 
lung  cancer  and 
cardiovascular diseases. However, a specific cause 
for concern is Sweden’s comparatively high death 
rate  due  to  suicide.  Although  the  suicide  rate  has 
decreased  in  Sweden  since  2005,  and  remains 
broadly in line with the 2011 rate, it is above the 
EU average, especially for women. 

Graph A14.1: Life expectancy at birth, years 

Source: Eurostat (demo_mlexpec) 

Sweden’s  health  system  is  characterised  by   
high-functioning  healthcare  service  delivery, 

(188)https://www.regeringen.se/pressmeddelanden/2025/01/regeri

ngen-har-presenterat-en-utvecklad-nationell-demensstrategi  

78 

with  a  focus  on  primary  care.  In  2022,  health 
spending per inhabitant was among the highest in 
the EU, with the largest share going to outpatient 
and  long-term  care  (33.3%  and  26.0%  of  total 
health  expenditure  respectively).  Approximately 
86% of current health expenditure was funded by 
the public purse. This, together with a low number 
of  hospital  beds  (150  per  100 000  population  in 
2022,  the  lowest  in  the  EU),  illustrates  Sweden’s 
strongly  outpatient-centred  care  model.  Out-of-
pocket payments account for a smaller proportion 
of  spending  on  health  in  Sweden  than  the  EU 
average. Nearly half of all out-of-pocket payments 
(189).  The 
are  for  outpatient  pharmaceuticals 
government  is  proposing  to  increase  as  of  1  July 
2025 by about 30% the maximum level (from SEK 
2900  to  SEK  3800)  above  which  pharmaceuticals 
become  free  of  charge  (190).  Spending  on  primary 
care  health  services  as  a  share  of  current  health 
expenditure  is  close  to  the  EU  average  for  dental 
care,  prevention  and  general  outpatient  care  (191). 
Regarding  access  to  primary  care,  24%  of 
respondents in a 2024 survey (192) declared unmet 
needs  by  a  general  practitioner  (GP)  or  health 
centre, compared to an EU average of 14%. 

Graph A14.2: Treatable mortality 

Age-standardised death rate (mortality that could be 
avoided through optimal quality healthcare) 
Source: Eurostat (hlth_cd_apr) 

Regarding  public  health,  there  is  scope  for 
Sweden  to  increase  its  focus  on  disease 
prevention.  In  2022,  spending  on  prevention 
accounted for 3.6% of total spending on health in 

(189) OECD/European Commission (2024), Health at a Glance: 

Europe 2024 - State of Health in the EU Cycle, pp. 186-187. 
(190)https://www.regeringen.se/contentassets/8caa230fecb646cd

80a54dfb06c1d096/prop.-2024-25-144.pdf 

(191) Health at a Glance: Europe 2024, pp. 151. 
(192) Living and Working in the EU e-survey | European Foundation 

for the Improvement of Living and Working Conditions 

83.282.483.183.183.481.380.480.180.681.420192020202120222023SwedenEU65.660.262.159.759.291.389.291.793.389.720182019202020212022per 100 000 populationSwedenEU 
 
          
 
          
 
 
 
 
Table A14.1:Key health indicators 

*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 based on 2022 (or latest 2021) data except for Luxembourg (2017). Doctors’ density data refer to practising 
doctors in all countries except Greece, Portugal (licensed to practise) and Slovakia (professionally active). Density of nurses: data 
refer to practising nurses (EU recognised qualification) in most countries except France and Slovakia (professionally active) and 
Greece (hospital only). **‘Available hospital beds’ covers somatic care, not psychiatric care. ***The EU median is used for patents. 
Source:  Eurostat database; European Patent Office; ****European Centre for Disease Prevention and Control (ECDC) for 2023. 

on 

remarkable 

reported  a 

immunisation 

Sweden,  far  below  the  EU  average  of  5.5%. 
Between 2019 and 2021, as a result of COVID-19, 
Sweden 
in 
increase 
programmes, 
spending 
epidemiological  surveillance  and  risk  and  disease 
control programmes. Also related to public health, 
Sweden  had  among  the  lowest  rates  of  antibiotic 
in  the  community  and  hospital 
consumption 
sectors in the EU in 2022. Consumption had been 
gradually  decreasing  over  the  past  decade  -  a 
trend  that  continued  during  the  pandemic.  This 
reflects  Sweden’s  comprehensive  approach  to 
addressing 
further 
boosted by its updated national strategy for 2020-
2025  aimed  at  preserving  the  possibility  of 
effective  treatment  of  bacterial 
in 
humans  and  animals.  However,  there  is  room  for 
improvement  on  certain  risk  factors,  as  daily 
consumption of fruit and vegetables in Sweden is 
below  the  EU  average  and  the  regular  use  of 
vaping  products  by  young  adults  (15–24-year-
olds)  is  above  the  EU  average,  whereas  for  other 
fares 
factors 
risk 
behavioural 
comparatively well.  

antimicrobial 

resistance, 

infections 

Sweden 

Sweden  has  a  high  density  of  doctors  and 
nurses  per  inhabitant,  with  some  regional 
disparities.  For  several  years,  doctor  density  in 
Sweden  has  been  above  the  EU  average  (4.4  per 
1 000 population  in  2022  vs  4.2),  with  a  greater 
concentration  in  the  capital  region  of  Stockholm 
and other major cities than in remote and sparsely 
populated 
the  number  of 
physician  graduates  per  100 000  inhabitants  is 
below the EU average, 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 

regions.  Although 

has quadrupled since 2006, mainly due to limited 
capacity  in  domestic  medical  schools.  Despite  the 
increasing  density  of  doctors,  several  regions 
report  shortages  of  GPs.  The  share  of  GPs  in 
Sweden is lower than the EU average.  

The  density  of  nurses  has  remained  stable  in  the 
last  decade.  However,  several  regions  report 
shortages,  particularly  of  specialist  (advanced 
practice)  nurses  in  primary  care.  Moreover,  more 
than  a  quarter 
(over  30%)  of  the  nursing 
workforce  is  aged  over  55,  which  raises  concerns 
about  the  sustainability  of  workforce  numbers. 
Sweden  has  not  earmarked  funding  for  health 
under its recovery and resilience plan (RRP) but the 
the 
RRP 
reform  on 
professional 
in 
healthcare  settings  and  in  the  long-term  care 
sector.  The  RRP  also  includes  an  investment  to 
improve the  skills  of  staff  working  in  elderly  care 
centres.  

title  of  nursing  assistants 

includes  a 

regulating 

health 

system 

contributes 
Sweden’s 
significantly  to  innovation  and  industrial 
development 
in  the  EU  medical  sector. 
Sweden  is  among  the  EU  countries  that  report 
considerable  public  spending  on  health  research 
and development (R&D) (193), alongside substantial 
R&D 
undertakings 
(multinationals)  headquartered  in  Sweden.  This  is 
also reflected in the very high number of European 
patents  granted:  268  in  2023  in  the  combined 
areas  of  pharmaceuticals,  biotechnologies  and 
medical  technologies  (194),  above  the  EU-level 

outlays 

budget 

from 

(193) For further details, see Annex 3. 
(194) European Patent Office, Data to download | epo.org. 

79 

20192020202120222023EU average* (latest year) Cancer mortality per 100 000 population216.7214.1206.6205.0n.a.234.7 (2022)Mortality due to circulatory diseases per 100 000 population 272.0 267.3 257.1 258.7n.a.336.4 (2022)Current expenditure on health, purchasing power standards, per capita3 8313 9304 2374 363n.a.3 684.6 (2022)Public share of health expenditure, % of current health expenditure 85.1 86.2 86.1 86.0 86.281.3 (2022)Spending on prevention, % of current health expenditure 3.23.44.33.6n.a.5.5 (2022)Available hospital beds per 100 000 population** 166 165 160 150n.a.444 (2022)Doctors per 1 000 population*4.34.34.4n.a.n.a.4.2 (2022)*Nurses per 1 000 population* 10.9 10.7 10.9n.a.n.a.7.6 (2022)*Mortality at working age (20-64 years), % of total mortality10.910.110.710.010.114.3 (2023)Number of patents (pharma / biotech / medical technology)29028028519226829 (2023)***Total consumption of antibacterials for systemic use,                    daily defined dose per 1 000 inhabitants****11.810.310.111.2n.a.20.0 (2023) 
 
 
          
 
 
 
median  of  29.  Clinical  trial  activity  is  widespread 
(195).  

Sweden aims to scale up the digitalisation of 
its  health  system,  with  support  from  EU 
programmes.  The  shares  of  people  accessing 
their  personal  health  records  online  and  using 
telemedicine instead  of  in-person  consultations  in 
Sweden  are  both  among  the  highest  in  the  EU. 
Sweden  is  planning  to  invest  in  e-health  services 
and  applications  under  the  2021-2027  cohesion 
policy funds. 

(195) EMA (2024), Monitoring the European clinical trials 

environment, p. 9. 

80 

 
 
HORIZONTAL 
ANNEX 15: SUSTAINABLE DEVELOPMENT GOALS 

social 

fairness 

This  Annex  assesses  Sweden’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  dimensions  of  competitiveness, 
and 
sustainability, 
macroeconomic stability. 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 
inequalities  and  tackle  climate 
poverty,  fight 
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 
the EU. 

Sweden  performs  well  on  SDGs  related  to 
competitiveness 
(SDGs 4,  8,  9).  Sweden 
continues  to  perform  above  the  EU  average  in 
terms of its productivity indicators. Sweden’s share 
of  gross  domestic  expenditure  on  R&D  (SDG 9) 

Graph A15.1: Progress towards the SDGs in Sweden 

rise  from  1.77% 

remains  high  at  3.60%  of  GDP  in  2023,  standing 
well  above  the  EU  average  2.24%  of  GDP.  In 
addition,  2.25%  of  the  labour  force  population 
worked in R&D in Sweden in 2023, representing a 
significant 
in  2018,  and 
exceeding  the  EU  average  of  1.56%  in  2023. 
Patent  applications  to  the  European  Patent Office 
(EPO)  increased  to  405  per  million  inhabitants  in 
2024,  up  from  391  in  2018,  exceeding  the  EU 
average of 156 applications per million inhabitants 
in 2024. Furthermore, on SDG 8 (Decent work and 
economic growth) Sweden performs above the EU 
indicators  with  a  high 
average 
for  most 
investment  share  of  GDP 
in  2024 
compared  to  the  EU  average  of  21.7%)  and  high 
rates  of  employment  (81.9%  in  2024  vs  the  EU 
average  of  75.8%).  On  SDG 4 (Quality  education), 
Sweden has a high tertiary attainment rate (54.4% 
vs the EU average of 44.2% in 2024). Sweden also 
performs  well  on  adult  participation  in  learning 
(37.5%;  EU  average:  13.3%  in  2024)  and  has  a 
high  share  of  adults  with  at  least  basic  digital 
skills  (66.4%  in  2023).  To  strengthen  digital  skills 

(24.4% 

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 
five 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 28 April 2025. Data refer mainly to the period 2018-2023 or 2019-2024. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

81 

 
 
 
 
 
 
 
 
remains  below  the  EU  average  (EU  average  of 
9.3%  in  2024).  On  SDG  5  (Gender  equality)  and 
SDG  8  (Decent  work  and  economic  growth), 
Sweden  performs better  than  the  EU  average.  On 
SDG 10  (Reduced  inequalities),  the  gap  between 
EU  and  non-EU  citizens  in  terms  of  employment 
rates has dropped (from 29% in 2019 to 19.1% in 
2024) but falls short of the EU average (12.5% in 
2024).  On  SDG 1  (No  poverty),  several  indicators 
have  followed  a  negative  trajectory,  though  most 
indicators remain above the EU average. Sweden’s 
RRP includes measures to increase the number of 
study  places  in  universities  and  other  higher 
education 
in  higher 
institutions,  as  well  as 
vocational  education  and 
training  at  upper 
secondary level. 

Sweden performs well on most SDGs related 
to  macroeconomic  stability  (SDGs 8,  16  and 
17).  Sweden  performs  well  across  the  indicators 
for  SDG 8,  including  on  sustainable  economic 
growth, employment and decent work, while at the 
same  time  reducing  general  government  gross 
debt  (SDG 17)  from  35.7%  of  GDP  in  2019  to 
33.5%  in  2024.  This  stands  significantly  lower 
than the EU  average of 81% of GDP in 2024. On 
SDG 16  (Peace,  justice  and  strong  institutions), 
Sweden performs above the EU  average for most 
indicators.  The  share  of  the  population  who 
perceive the independence of the justice system to 
be very or fairly good is high at 78% in 2024 (EU 
average:  52%  in  2024).  The  RRP  aims  to  help 
preserve 
the  Swedish 
economic  model,  and  therefore  contributes  to 
macroeconomic  stability  through  reforms  tackling 
demographic challenges. 

the  sustainability  of 

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

and  increase  human  capital,  the  RRP  sets  out 
measures to increase the number of study places 
in  higher  vocational  education  and  ensure 
resources  for  universities  and  other  higher 
education  institutions.  The  recovery  and  resilience 
plan (RRP) also provides funding for investment in 
broadband expansion. 

final 

energy 

in  gross 

Sweden  performs  well  on  most  of  the  SDGs 
related to  sustainability (SDGs 2, 6, 7, 9, 11, 
13,  15),  but  needs  to  catch  up  with  the  EU 
average on others  (SDGs 12 and  14).  Sweden 
performs  very  well  on  SDG 13  (Climate  action), 
with  net  greenhouse  gas  emissions  of  1.2  tonnes 
per  capita  in  2023,  standing  well  below  the  EU 
average  (6.8  tonnes  in  2023).  The  share  of 
energy 
renewable 
consumption  (SDG 7)  increased  from  53.9%  in 
2018  to  66.4%  in  2023,  which  is  significantly 
above the EU average (24.6% in 2023). For SDG 9 
(Industry,  innovation  and  infrastructure),  Sweden 
scores above the EU average on all indicators. The 
circular  material  use  rate  (SDG 12)  improved 
significantly  increasing  from  6.6%  in  2018  to 
9.9%  in  2023.  However,  it  remains  below  the  EU 
average  (11.8%  in  2023).  On  SDG 14  (Life  below 
water),  despite  having  16%  of  its  marine  area 
protected (higher than  the  EU  average  of  12.3%), 
Sweden  stands  below  the  EU  average  on  the 
percentage  of  bathing  sites  with  excellent  water 
quality  (68.4%  in  2023  compared  to  the  EU 
average  of  88.8%).  Sweden  performs  well  on 
several targets for SDG 11 (Sustainable cities and 
communities), particularly related to quality of life 
in cities and communities. Despite some indicators 
remaining  above  the  EU  average,  the  trajectory 
over the past years has been negative. This is true 
for sustainable mobility (share of buses and trains 
in  total  passenger  transport  fell  to  19%  in  2022 
from  19.6%  in  2017,  albeit  remaining  above  the 
EU  average  of  16.6%  in  2022).  In  addition,  the 
recycling  rate  of  municipal  waste  dropped  from 
45.8%  in  2018  to  39.3%  in  2023  (EU  average: 
48.2%  in  2023).  Sweden’s  RRP  supports  the 
acceleration  of  the  green  transition  of  carbon-
intensive sectors such as transport and industry. 

Sweden performs well on most SDGs related 
to social fairness (SDGs 3, 4, 5, 7, 8, 10), but 
is  moving  away  from  the  SDGs  on  SDG  1. 
Sweden  continues  to  perform  above  the  EU 
average  on  most  indicators  for  SDG 3  (Good 
health and well-being). Although the share of early 
leavers  from  education  and  training  (SDG  4) 
increased  from  6.5%  in  2019  to  7.2% in  2024,  it 

82 

 
 
 
ANNEX 16: CSR PROGRESS AND EU FUNDS IMPLEMENTATION 

benefits  for  the  economy  and  Swedish  society. 
Project  selection  under  the  2021-2027  cohesion 
and 
policy 
implementation 
gained 
momentum. 

programmes 
of 

accelerated 
has 

has 
projects 

its 

The  Swedish  RRP  contains  30  investments 
and 21 reforms to stimulate sustainable growth, 
sustainability, 
environmental 
improve 
digitalisation  and  foster  skills.  A  year  before  the 
end  of  the  RRF  timespan,  the  implementation  of 
Sweden’s  RRP  is  delayed.  At  present,  Sweden’s 
first  payment  request  covering  53%  of  the 
milestones  and  targets 
is  under 
assessment (200).  

its  RRP 

in 

the 

Sweden  also  receives  funding  from  several 
other  EU  instruments,  including  those  listed  in 
Table  A16.1.  Most  notably, 
common 
agricultural  policy  (CAP)  provides  Sweden  with  an 
EU  contribution  of  EUR 4.5  billion  under  the  CAP 
strategic  plan  for  2023-2027(201).  A  further 
EUR 485.6 million are available under the Asylum, 
Migration  and  Integration  Fund  (AMIF),  together 
with the border management and visa instrument 
(BMVI)  and  internal  security  funds.  Operations 
amounting  to  EUR  939  million  (202)  have  been 
signed  under  the  InvestEU  instrument  backed  by 
the  EU  guarantee,  improving  access  to  financing 
for riskier operations in Sweden. 

recommendations 

Sweden faces structural challenges in a wide 
range  of  policy  areas,  as  identified  in  the 
country-specific 
(CSRs) 
addressed  to  the  country  as  part  of  the 
European  Semester.    They  refer,  among  other 
things,  to  the  budgetary  framework  and  fiscal 
governance, 
taxation  policy,  housing,  skills, 
vocational  education  and  training,  adult  learning, 
opportunities, 
non-discrimination 
renewable  energy,  energy 
infrastructure  and 
networks, and the business environment. 

equal 

and 

The Commission has assessed the 2019-2024 
CSRs  considering  the  policy  action  taken  by 
Sweden  to  date  and  the  commitments  in  its 
recovery  and  resilience  plan  (RRP).  At  this 
stage, Sweden has made at least ‘some progress’ 
on 56% of the CSRs (196), and ‘limited progress’ on 
29% (Table A16.2). 

to 

by 

competitiveness, 

EU funding instruments provide considerable 
resources 
supporting 
Sweden 
investments  and  structural  reforms  to 
environmental 
increase 
sustainability  and  social  fairness,  while 
helping  to  address  challenges  identified  in 
the  CSRs.  In  addition  to  the  EUR 3.4  billion 
funding  from  the  Recovery  and  Resilience  Facility 
(RRF) in 2021-2026, EU cohesion policy funds (197) 
are  providing  EUR 1.7  billion 
to  Sweden 
(amounting  to  EUR 4  billion  with  national  co-
to  boost 
financing) 
competitiveness  and  growth.  Support  from  these 
instruments  combined  represents  around  1%  of 
these 
2024  GDP 
is 
instruments  to  different  policy  objectives 
outlined 
in  Graphs  A16.1  and  A16.2.  This 
substantial  support  comes  on  top  of  financing 
the  2014-2020 
provided 
multiannual  financial  framework,  which  financed 
projects  until  2023  and  has  had  significant 

(199).  The  contribution  of 

to  Sweden  under 

for  2021-2027 

(198) 

(196) 12% of the 2019-2024 CSRs have been fully implemented, 
17% substantially implemented, and some progress has 
been made on 27%. 

(197) In 2021-2027, cohesion policy funds include the European 
Regional Development Fund, the European Social Fund Plus 
and the Just Transition Fund. The information on cohesion 
policy included in this annex is based on adopted 
programmes with the cut-off date of 5 May 2025. 

(198) European territorial cooperation (ETC) programmes are 

excluded from the figure. 

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

(200) As of mid-May 2025, Sweden has submitted 1 payment 

request which is under assessment. 

(201) An overview of Sweden’s formally approved strategy to 

implement the EU’s common agricultural policy nationally 
can be found at https://agriculture.ec.europa.eu/cap-my-
country/cap-strategic-plans/sweden_en 

applicable. GDP figures are based on Eurostat data for 2024. 

(202) Data reflect the situation on 31.12.2024. 

83 

 
 
 
 
 
Graph A16.1: Distribution of RRF funding in Sweden 
by policy field 

(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 circle 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. 
Source: European Commission 

Graph A16.2: Distribution of cohesion policy 
funding across policy objectives in Sweden 

Source: European Commission 

Cohesion  policy  funds  aim  to  increase  the 
productivity and competitiveness of Swedish 
firms and improve the business environment. 
The  European  Regional  Development  Fund  (ERDF) 
and the Just Transition Fund (JTF) will support over 
23 500 businesses, of which 1 062 are small and 
medium-sized enterprises (SMEs) investing in skills 
for  smart  specialisation,  for  industrial  transition 
and  for  entrepreneurship.  The  ESF+  is  identifying 
the  skills  needed  for  the  green  transition  in  both 
the  private  and  the  public  sectors.  41%  of 
unemployed  participants  are  in  employment  six 
months after participation in these measures. The 
ESF+  is  used  to  explore  how  labour  and  skills 
needs  will  evolve,  examining  impacts  on  work 
environments  and  potential  inequalities,  such  as 
those  between  remote  and  on-site  workers,  the 
ultimate  goal  being  to  ensure  an 
inclusive 
transition. 

84 

by 

are 

backbone 

contributing 

in  Sweden,  for 

Other 
funds 
to 
instance 
competitiveness 
through  open  calls.  The  Connecting  Europe 
Facility  (CEF)  has  financed  the  construction  and 
upgrade of rail lines, the upgrade of maritime and 
inland  waterway  ports,  and  recharging  points  for 
electric  vehicles  and  hydrogen  refuelling  stations 
for  light  and  heavy-duty  vehicles.  The  CEF  Digital 
has increased the capacity, resilience and security 
of 
developing 
infrastructure 
connectivity with other countries and advanced the 
deployment  of  5G  in  smart  communities.  Horizon 
Europe  has  supported  research  and  innovation 
from  scientific  breakthroughs 
to  scaling  up 
innovations,  with  the  European  Research  Council 
and  Climate,  Energy  and  Mobility  as  top  priorities 
in Sweden. The Technical Support Instrument (TSI) 
has 
driving 
supporting  Sweden 
manufacturing  SMEs  towards  sustainability  and 
competitiveness in the green and digital economy, 
helping  clinicians  in  making  informed  medical 
prescriptions  by  gathering  provision  of  data 
through  an  AI-based  model,  and  improving  data 
governance  in  local  decision-making  processes  at 
the  Swedish  County  Administrative  Board  of 
Södermanland.  

been 

in 

to 

the 

Sweden’s  RRP  also  contains  ambitious 
business 
improve 
measures 
environment  and  competitiveness.  As  part  of 
the  measures  covered  by  payment  requests 
is 
submitted  over 
implementing reforms to improve the fight against 
money  laundering  and  terrorist  financing  and  has 
made 
investments  to  expand  the  broadband 
network.  These,  along  with  other  measures  in  the 
plan,  will  help  make  Sweden’s  economy  greener, 
more digital, inclusive and resilient. 

the  past  year,  Sweden 

EU  funds  are  playing  a  significant  role  in 
promoting  environmental  sustainability  and 
the  green  transition  in  Sweden  during  the 
current  seven-year  EU  budget  (multiannual 
financial  framework).  Over  EUR 375  million 
from the ERDF and JTF are being used to support 
the  green  transition.  The  additional  production 
capacity  for  renewable  energy  should  reach 
309 MW,  and  the  additional  capacity  for  waste 
recycling  510 200 tonnes/year.  The  JTF  will  focus 
on  helping  the  steel  industry  in  Norrbotten,  the 
metal  industry  in  Västerbotten,  and  the  cement 
industry  on  the  island  of  Gotland  during  their 
industrial 
carbon 
neutrality.  These  investments  are  expected  to 
contribute  to  a  decrease  of  3 041 554  tonnes  of 

transformation 

towards 

Green transitionDigital transformationSmart, sustainable andinclusive growthSocial & territorial cohesionHealth & resilienceNext generationSmarter EuropeGreener EuropeConnected EuropeSocial EuropeEurope closer to citizensJTF specific objective 
     
 
   
Sweden’s  RRP  contains  several  reforms  and 
investments  related  to  fairness  and  social 
policies.  Measures  included  in  the  plan  aim  to 
improve  employment  opportunities  by  upskilling 
the labour force and increasing the flexibility of the 
labour market through a modernised employment 
protection law. The first payment request includes 
investments  used  to  provide  additional  study 
places  in  higher  education  and  to  improve  elderly 
care  by  upskilling  and  training  staff. Reforms 
covered  by 
include 
modernising  employment  protection  and  labour 
market integration. 

the  payment 

request 

financial  contribution 

CO2 eq./year by  2029. The Swedish CAP strategic 
plan  will  dedicate  30%  (about  EUR 1.3  billion)  of 
the  EU 
to  supporting 
environmental and climate objectives, focusing on 
carbon  sequestration,  biodiversity  and  valuable 
grasslands,  and  on  increasing  knowledge  about 
sustainable  production.  Farmers  or  other  land 
managers  may  receive  support  for  managing 
pastures  and  meadows  to  preserve  and  increase 
their  natural  and  cultural  environmental  value, 
with  the  aim  of  maintaining  over  420 000 
hectares annually. 

Sweden’s  RRP, 
including  the  REPowerEU 
chapter, has a comprehensive set of reforms 
and  investments  for  the  green  transition. 
These  are  aimed  at  accelerating  the  green 
transition  of  carbon-intensive  sectors  such  as 
industry, housing and transport, while ensuring the 
competitiveness of the Swedish economy.  Sweden 
submitted  its  first  payment  request  in  December 
2024.  The  request  covers  important  reforms  that 
incentivise  the  decarbonisation  of  transport  by 
abolishing the reduction of energy tax on fuel and 
adjusted  taxable  benefit  rates  for  company  cars. 
The  payment  request  also  covers  investments  at 
local  and  regional  level  to  reduce  carbon  dioxide 
emissions  and  to  upgrade  railway  infrastructure. 
To  help  Sweden  implement  its  RRP,  the  TSI 
supports, among other things, the achievement of 
greenhouse gas emissions reduction targets.  

In 

to  essential  services 

Promoting  fairness,  social  cohesion  and  
improving  access  to  basic  services  are 
among  the  key  priorities  of  EU  funding  in 
Sweden.  The  Swedish  European  Social  Fund  Plus 
(ESF+)  programme  promotes  social  fairness  by 
implementing  active  inclusion  programmes  that 
support  disadvantaged  people.  The  programme 
for 
improves  access 
vulnerable  groups  and  those  in  less  developed 
regions. 
the  sparsely  populated  northern 
regions,  the  ESF+  will  launch  at  least  50  projects 
to  support  local  and  regional  development,  foster 
collaboration  between  organisations,  and  provide 
education,  training  and  support  to  individuals 
seeking  employment.  This  will  address  challenges 
like distance, low population density and an ageing 
population. 
In  addition,  the  AMIF  contributes 
largely  to  the  resettlement  and  humanitarian 
admission, as well as to integration tailored to the 
increasing 
third-country  nationals, 
needs  of 
opportunities  for  the  target  group  to  establish 
themselves  in  Swedish  society  and  the  Swedish 
labour market. 

85 

 
 
Table A16.1:Selected EU funds with adopted allocations - summary data (million EUR) 

(1) The cut-off date for data on disbursements under the RRF is 31 May 2025 
(2) Cohesion policy 2014-2020 allocations include REACT-EU appropriations committed in 2021-2022. 
(3) These amounts relate only to disbursements made from 2021 onwards and do not include payments made to the Member 
State before 2021.  Hence the figures do not comprise the totality of payments corresponding to the 2014-2020 allocation. The 
cut-off date for data on disbursements under EMFAF and EMFF is 29 April 2025.  The cut-off date for data on disbursements 
under cohesion policy funds, AMIF, BMVI and ISF is 5 May 2025. 
(4) AMIF - Asylum, Migration and Integration Fund; BMVI - Border Management and Visa Instrument; ISF - Internal Security Fund. 
(5) Expenditure outside the CAP strategic plan is not included. 
(6) The cut-off date for data on EARDF disbursements is 5 May 2025. The information on EAGF disbursements is based on the 
Member State declarations until March 2025.  Disbursements for the Direct Payments (EAGF) started in 2024. 
Source: European Commission 

86 

Instrument/policyDisbursed since 2021   (1)             RRF grants (including the RepowerEU allocation)0RRF loans0 Instrument/policyAllocation 2014-2020 (2)Allocation 2021-2027 Disbursed since 2021 (3)    (covering total payments to the Member State on commitments originating from both 2014-2020 and 2021-2027 programming periods) Cohesion policy (total)2 020.81 725.01 243.5European Regional Development Fund (ERDF)1 008.0 862.5 534.5European Social Fund (ESF, ESF+)1 012.7 706.7 655.8Just Transition Fund (JTF) 155.7 53.3European Maritime, Fisheries and Aquaculture Fund (EMFAF) and the European Maritime and Fisheries Fund (EMFF) 120.2 115.967.0Migration, border management and internal security - AMIF, BMVI and ISF (4) 395.6 485.6276.2The common agricultural policy under the CAP strategic plan (5)Disbursements under the CAP Strategic Plan (6)Total under the CAP strategic plan1 616.4European Agricultural Guarantee Fund (EAGF)1 360.6European Fund for Agricultural Development (EAFRD) 255.8Allocation 2023-20274 521.03 461.51 059.4Allocation 2021-2026 3 445.7FisheriesMigration and home affairs 
 
 
     
 
Table A16.2:Summary table on 2019-2024 CSRs 

(Continued on the next page) 

87 

SwedenAssessment in May 2025Relevant 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 progressSDG 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 progressSDG 82019 CSR 2Some progressFocus investment related economic policy on education and skillsSome progressSDG 4, 10, 11, maintaining investment in sustainable transport to upgrade the different transport modes, in particular railwaysSubstantial progressSDG 10, 11, and research and innovation, taking into account regional disparities.Substantial progressSDG 9, 10, 112019 CSR 3Substantial progressEnsure effective supervision and the enforcement of the anti-money laundering framework.Substantial progressSDG 8, 162020 CSR 1Substantial progressInlinewiththegeneralescapeclause,takeallnecessarymeasurestoeffectivelyaddressthepandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuringdebtsustainability, while enhancing investment.Not relevant anymoreSDG 8, 16Ensuretheresilienceofthehealthsystem,includingthroughadequatesupplies of critical medical products, infrastructure and workforce.Substantial progressSDG 32020 CSR 2Some progressFoster innovationSubstantial progressSDG 9and support education and skills development.Some progressSDG 4Front-load mature public investment projects and Limited progressSDG 8, 16promote private investment to foster the economic recovery.Some progressSDG 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticularoncleanand efficient production and use of energy,Some progressSDG 7, 9, 13high-tech and innovative sectors, Substantial progressSDG 95G networksFull implementationSDG 9and sustainable transport.Substantial progressSDG 112020 CSR 3Substantial progressImprovetheeffectivenessofanti-moneylaunderingsupervisionandeffectively enforce the anti-money laundering framework.Substantial progressSDG 8, 162021 CSR 1Not relevant anymoreIn2022,maintainasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilienceFacility,andpreservenationallyfinancedinvestment.Not relevant anymoreSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainabilityinthemedium term.Not relevant anymoreSDG 8, 16Atthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupporting the green and digital transition.Not relevant anymoreSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacy and sustainability of health and social protection systems for all.Not relevant anymoreSDG 8, 16 
 
 
  
 
Table (continued) 

(Continued on the next page) 

88 

2022 CSR 1Limited progressIn2023,ensurethatthegrowthofnationallyfinancedprimarycurrentexpenditureisinlinewithanoverallneutralpolicystance,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadyto adjust current spending to the evolving situation. Not relevant anymoreSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguse of the Recovery and Resilience Facility and other Union funds. Not relevant anymoreSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudent medium-term fiscal positions. Not relevant anymoreSDG 8, 16Reducerisksrelatedtohighhouseholddebtandhousingmarketimbalancesbyreducingthetaxdeductibilityofmortgageinterestpaymentsorbyincreasing recurrent property taxes.No progressSDG 8, 10, 12Stimulateinvestmentinresidentialconstructiontoeasethemosturgentshortages,inparticularbyremovingstructuralobstaclestoconstructionandby ensuring the supply of buildable land.Limited progressSDG 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 progressSDG 4, 8, 10Developskillsofdisadvantagedgroups,includingpeoplefrommigrantbackgrounds,byadaptingresourcesandmethodstotheirneedstohelptheirintegration into the labour market.Some progressSDG 4, 8, 102022 CSR 4 Some progressReduce overall reliance on fossil fuels Limited progressSDG 7, 9, 13byacceleratingthedeploymentofrenewablesandboostingcomplementaryinvestmentinnetworkinfrastructure,strengtheninginternalgridswithinthecountry to ensure sufficient network capacity,Some progressSDG 7, 9, 13improving energy efficiency, Some progressSDG 7andfurtherstreamliningpermittingproceduresinrelationtorenewableenergy projects. Some progressSDG 7, 9, 132023 CSR 1 Some progressWinddowntheemergencyenergysupportmeasuresinforce,assoonaspossiblein2023and2024.Shouldrenewedenergypriceincreasesnecessitateneworcontinuedsupportmeasures,ensurethatthesearetargetedatprotectingvulnerablehouseholdsandfirms,fiscallyaffordable,and preserve incentives for energy savings.Full ImplementationSDG 8, 16While maintaining a sound fiscal position in 2024,Full implementationSDG 8, 16preservenationallyfinancedpublicinvestmentandensuretheeffectiveabsorptionofRRFgrantsandotherEUfunds,inparticulartofosterthegreen and digital transitions.Full implementationSDG 8, 16Fortheperiodbeyond2024,continuetopursueinvestmentandreformsconducivetohighersustainablegrowthandpreserveaprudentmedium-term fiscal position.Full implementationSDG 8, 16Reducerisksrelatedtohighhouseholddebtandhousingmarketimbalancesbyreducingthetaxdeductibilityofmortgageinterestpaymentsand/orincreasingrecurrentpropertytaxes,whileestablishingadequatetoolsforbetter policy assessment and targeting.No progressSDG 8, 10, 12Stimulateinvestmentinresidentialconstructiontoeasethemosturgentshortages,inparticularbyremovingstructuralobstaclestoconstructionandby ensuring the supply of buildable land.Limited progressSDG 8, 10, 12RRP 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) 

Source: European Commission 

89 

Improvetheefficiencyofthehousingmarket,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 progressSDG 4, 10Developtheskillsofdisadvantagedgroups,particularlypeoplewithmigrantbackgrounds,byadaptingresourcesandmethodstotheirneeds,withaviewto helping them integrate into the labour market.Some progressSDG 4, 8, 102023 CSR 4Limited progressReduce reliance on fossil fuelsLimited progressSDG 7, 9, 13byacceleratingthedeploymentofrenewables,includingbyexpandingandupgrading energy transmission networks,Some progressSDG 7, 9, 13introducingreformstosimplifyandspeedupadministrativeandpermittingprocedures,Some progressSDG 7, 9, 13improving energy efficiency andSome progressSDG 7, 9, 13steppinguppolicyeffortsaimedattheprovisionandacquisitionofskillsandcompetences needed for the green transition.Some progressSDG 4, 7, 132024 CSR 1Limited progressSubmit the medium-term fiscal-structural plan in a timely manner.  Full implementationSDG 8, 16Reducerisksrelatedtohighhouseholddebtandhousingmarketimbalancesbyreducingthetaxdeductibilityofmortgageinterestpaymentsandincreasingrecurrentpropertytaxes,whiledevelopingappropriatetoolsforbetter policy assessment and targeting.No ProgressSDG 8, 10, 12Stimulateinvestmentinresidentialconstructiontoeasethemosturgentshortages, in particular by removing structural obstacles to construction.Limited ProgressSDG 8, 10, 12Improvetheefficiencyofthehousingmarket,includingbyintroducingreforms in the rental market.No ProgressSDG 8, 10, 122024 CSR 2In light of prolonged delays, significantly accelerate the implementation of the recoveryandresilienceplan,includingtheREPowerEUchapter,ensuringcompletionofreformsandinvestmentsbyAugust2026.Acceleratetheimplementationofcohesionpolicyprogrammes.Inthecontextoftheirmid-termreviewcontinuefocusingontheagreedpriorities,whileconsideringtheopportunitiesprovidedbytheStrategicTechnologiesforEuropePlatforminitiative to improve competitiveness.2024 CSR 3Limited ProgressImproveeducationalperformance,includingofstudentswithdisadvantagedsocio-economicandmigrantbackgrounds,byaddressingthepersistentshortageofqualifiedteachers,byensuringequalaccessopportunitiestotheschoolingsystemandbyfurthersupportingthetransitionofstudentstoupper secondary school. No ProgressSDG 4, 10Developtheskillsofthelabourforce,particularlythosefromdisadvantagedsocio-economicandmigrantbackgrounds,throughtargetedpolicymeasuresand resources, to improve their integration into the labour market.Limited ProgressSDG 4, 8, 102024 CSR 4No ProgressEnsuretheachievementofgreenhousegasemissionsreductiontargetsbyreducing in particular emissions from road transport, No ProgressSDG 7, 9, 13andaccelerateandstreamlinepermittingproceduresfordeployingrenewables, in particular for offshore and onshore wind energy.Limited ProgressSDG 7, 9, 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.RRP 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. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union. 
 
  
 
ANNEX 17: COMPETITIVE REGIONS 

regions  continue 

Overall,  Sweden’s 
to 
perform  well  on  economic  and  social 
indicators 
in  comparison  with  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. 
Stockholm  is  the  best  performing  Swedish  region 
on  most  of  the  indicators,  whereas  regional 
development  is  hampered  by  lack  of  sufficient 
labour  supply  and  accessibility  issues  in  the 
northern parts of Sweden. 

Sweden  is  among  the  top  10  wealthiest  EU 
Member  States,  characterised  by  a  strong 
economy  with  high  living  standards.  GDP  per 
head  (in  purchasing  power  standard)  at  country 
level was 114% of the EU average in 2023. Most 
NUTS 2  regions  were  above  the  EU  average, 
except  for  Östra  Mellansverige  (99%),  Småland 
med öarna (98%), and Norra Mellansverige (86%). 
The  Stockholm  capital  region  stands  out,  with  a 
GDP  per  capita  at  153%  (Table  A17.1).  GDP  per 
capita  growth  between  2014  and  2023  was 
relatively slow in Sweden, with all NUTS 2 regions 
growing slower than the EU average (Table A17.1). 

Competitiveness 

Labour  productivity  in  Sweden  continues  to 
be  strong  in  an  EU-wide  context.  All  regions 
are  performing  well,  but  the  national  average  is 
largely  driven  by  the  exceptional  performance  of 
Stockholm  (Graph  A17.1).  The  productivity  gap 
between the most and the least productive regions 
has  slightly  increased  over  the  past  decade.  This 

increasing  gap  is  likely  linked  to  limited  transport 
connections,  lower  employment  in  knowledge-
intensive  sectors,  suboptimal  R&D  expenditure, 
and  lower  levels  of  educational  attainment in  the 
lower  performing  regions  Regarding  the  indicator 
real  productivity  growth,  some  regions  are  falling 
behind  the  EU  average,  Norra  Mellansverige 
scoring the lowest among these. 

Graph A17.1: Labour productivity per hour 

Source: ARDECO (JRC) 

Sweden is an innovation leader, but there are 
notable  differences  in  regional  innovation 
performance.  Västsverige  (5.27%)  is  the  top 
region  for  R&D  expenditure,  while 
Swedish 
Mellersta Norrland invests the least in R&D (0.7%) 
(Table  A17.1).  Stockholm  is  one  of  the  most 
innovative regions in the EU. A similar pattern can 
be  seen  in  the  Regional  Competitiveness  Index, 
where the capital region is ranked the highest and 
Norra  Mellansverige  the  lowest  in  Sweden  (Map 
17.1). 

Norra  Mellansverige  –  the  only  transition 

Table A17.1:Selection of indicators at regional level in Sweden 

Source: Eurostat and JRC 

90 

0102030405060708090201220132014201520162017201820192020202120222015 EUR per hour workedOther NUTS2 regionsCapital regionNational averageEU27GDP per head (PPS)Real GDP per head growthProductivity - GDP per hour worked (PPS)Real productivity growth (per hour worked)R&D expenditureEmployment in high-technology sectorsPopulation with high educational attainmentPopulation growthEmployment rate 20-64Access to primary schoolsHouseholds with broadband connectionTransport performance by carGreenhouse gas emissionsIndex EU-27 = 100Average annual % changeIndex EU-27 = 100Average annual % change% of GDP% of total employment% of population aged 25-64Average annual change per 1000 residents% of population aged 20-64Children under 15 within 15-minute walk to primary school (%)% of households% of population within 1h30min  reach tCO2eq. per person20232014-202320222013-20222022202420242013-202220242023202120212023European Union (27 MS)1001.61000.92.285.236.11.475.81009077.27.1Sweden1141.11161.33.406.850.59.681.91209174.14.6Stockholm1531.21431.63.5911.259.613.883.71609390.51.5Östra Mellansverige991.11050.83.606.246.410.479.61039370.65.5Småland med öarna980.9981.31.573.543.17.884.21039055.26.5Sydsverige1001.21071.43.215.552.410.680.11019180.94.1Västsverige1111.11111.55.276.349.79.881.51168976.85.0Norra Mellansverige86-0.11010.61.053.442.24.082.5999051.95.3Mellersta Norrland1021.11080.90.704.639.22.181.61099058.37.0Övre Norrland1130.71231.22.434.747.93.283.61298356.49.9 
 
 
     
 
 
 
   
 
the 

related 

in  Sweden  –  had 

region 
lowest 
performance  of  Swedish  regions  for  several 
indicators 
and 
competitiveness.  These  indicators  include  GDP, 
GDP  growth,  productivity growth  and  employment 
in  high  technology  sectors.  For  some  of  these 
indicators,  Norra  Mellansverige  was  even  below 
the EU average (Table A17.1). 

growth 

to 

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

Source: DG REGIO, JRC based on Eurostat 

in 
There  are  also  notable  differences 
population  with  high  educational  attainment 
between the regions. Mellersta Norrland has the 
lowest  performance,  although  the  region  is  a  few 
percentage  points  above  the  EU  average  (Table 
A17.1). 

The  population  is  growing  in  all  Swedish 
regions,  although  growth  is  slowing  down. 
This  growth  is  mainly  due  to  migration,  with  the 
capital region’s population growing fastest and the 
three most northern regions slowest (Table A17.1). 

decreasing 

a 
change 

These  three  regions  also  have  the  largest 
proportion  of  people  over  65,  and  they 
struggle  with 
natural 
(fertility/mortality), 
population 
although  for  now  this  is  countered  by  net 
migration.  According 
to  Swedish  population 
forecasts at NUTS 3 level, seven out of 21 regions 
will see a decrease in population by 2040. The two 
counties  with  the  lowest  demographic  forecasts 
for  the  period  2023-2040  are  Norrbotten  (-6.2%) 
and  Västernorrland  (-7.3%),  which  are  two  of  the 

sparsely  populated  areas 
Sweden (203). 

in 

the  north  of 

Social fairness 

Sweden  enjoys  a  relatively  high  level  of 
equality compared to most EU countries, but 
some regional disparities inevitably exist. The 
employment  rate  across  all  regions  is  one  of  the 
highest  in  the  EU.  It  reached  80%  in  all  regions 
and  81.9%  for  the  country  as  a  whole,  six 
percentage points above the EU average. 

The three northern regions and Småland med 
öarna  are  much less  accessible  compared  to 
other Swedish regions or the EU average. This 
applies both for rail and car transport performance 
(Table A17.1). 

In  general,  Swedish  urban  areas  have  easier 
access  to  services  compared  to  rural  and 
remote  areas.  Access  to  primary  schools  is  one 
example  of  this.  The  capital  region  has  a  much 
larger percentage of children living within walking 
distance  of  a  primary  school  compared  to  the 
northern  regions  (Table  A17.1).  Having  good 
quality  schools  and  healthcare,  in  addition  to  job 
opportunities,  are  key  issues  affecting  people's 
decision to stay in or move to a certain region. 

Highspeed  broadband  is  essential,  especially 
for  rural  areas,  to  provide  services  (for 
example in healthcare and education) as well 
as  providing 
job  opportunities.  Swedish 
households' access to broadband is around the EU 
average of 90%, except in Övre Norrland, where it 
is 83% (Table A17.1). 

issue 

Skills  shortages  are  an 
in  many 
Swedish regions, especially in towns situated 
outside  the  big  cities.  Skills  shortages  in  the 
health  and  social  care  sectors  are  especially 
severe 
commuter 
(204).  An  ageing  and  shrinking 
municipalities 
population  outside  the  urban  areas  will  make  it 
even  more  difficult  to  provide  accessible  good 
quality  services  in  different  parts  of  Sweden,  but 

rural  areas  and 

in 

in 

(203) Statistics Sweden 

(204) AgriFood 2024:1 - Arbetskraftsbrist - ett problem eller en 

möjlighet? 

91 

 
 
 
 
 
perhaps  more  so 
northern areas. 

in  the  sparsely  populated 

Sustainability 

leaders 

Swedish  regions  are  global 
in 
sustainability, with ambitious goals to reduce 
emissions  and  increase  the  proportion  of 
fossil-free  energy in  their  economy.  However, 
Övre  Norrland  stands  out  from  other  Swedish 
regions  in  greenhouse  gas  emissions  due  to  its 
heavy industry. While the rest of Sweden manages 
to  stay  under  the  EU  average,  Övre  Norrland  is 
significantly above (Table A17.1). 

The  large  supply  of  clean  energy  is  driving 
the green industrial transition in the north of 
Sweden. Nevertheless, more clean energy may be 
needed if the full potential of the green transition 
is  to  be  realised.  The  many  energy-intensive 
industrial  projects  currently  being  planned  and 
implemented  would  require  more  energy  than  is 
currently being generated in the region. Therefore, 
increasing  clean  energy  production  would  help  to 
create more green jobs in the long term (205). 

Skilled  labour  shortages  are  an  obstacle  to 
regional  development,  especially  in  relation 
to  the  green  transition  in  Sweden’s  most 
northerly  regions.  In  2024,  Övre  Norrland  had 
the lowest unemployment rate in Sweden at 5.2%, 
compared  to  the  national  average  of  8.4%.  It  is 
estimated that more than 100 000 skilled workers 
will be needed in northern Sweden by 2035, which 
constitutes  a  major  skills  gap  (206).  Accessibility 
and quality of transport links, especially railway, is 
also an issue in the northern parts of Sweden, with 
its long distances and sparse population. 

(205) Norrbotten: Industriomställningen och dess 

samhällsekonomiska effekter 

(206) Norrbotten: Industriomställningen och dess 

samhällsekonomiska effekter 

92