Sweden: Gradually brighter outlook
The Swedish economy is set for recovery in 2025 after three challenging years. Since May 2024, the Riksbank has reduced its policy rate by 175 basis points, easing household and business interest expenses. Growth is gradually improving, with household financial positions strengthened.

Global uncertainty affects investments near-term, while defence spending could boost growth further out.

The labour market is weak but stabilizing, with improvements expected in the latter half of 2025. Wage negotiations are ongoing, and despite the recent inflation rise, the Riksbank is likely to cut rates to 2 percent before summer.

Norway: Stronger growth ahead
Looking towards Norway, growth in 2024 ended up at a very modest 0.6 percent despite strong growth in oil investment, government demand and mainland exports. It was a result of activity continuing to decline in more rate-sensitive parts of the economy.

In 2025 and 2026, growth is expected to pick up and the outlook points to some kind of growth rotation where private consumption, housing investments and corporate investments will increase.

As the capacity utilisation is below normal levels and the disinflation process continues, the door for Norges Bank to cut rates will open this year, and it is expected that the policy rate will move down towards the normal level of 2.5 percent in 2026.

Finland: Accelerator missing
Finland’s economy turned towards modest growth in the first half of 2024, but the fourth quarter was weak and the volume of GDP for 2024 remained lower than the previous year.

Recovery will still be slow in early 2025, particularly due to consumer caution, but growth is expected to pick up as purchasing power increases and interest rates continue to fall.

A gradual pick-up in exports and a budding turnaround in construction will support the rise, which is expected to intensify in 2026. However, the threat of a trade war casts a shadow of uncertainty over the growth prospects in exports.