International Trade in Sweden

News Related to International Trade in Sweden

Business outline for Sweden

Main Industry Sectors

Agriculture represents less of 2% of the GDP. The main agricultural products are cereals, dairy products, meat, wood and potatoes. The country has a wealth of natural resources: forests, iron, lead, copper, zinc and hydroelectric energy.
The industrial sector contributes to slightly over a quarter of the GDP. It is dominated by groups such as Volvo, Saab, Ericsson, ABB, AstraZeneca, Electrolux, Ikea, H&M, etc. Sweden's main manufacturing activities are processing wood, paper, electronic equipment, industrial food processing, pharmaceutical products, etc. The new technologies and biotechnologies sectors are of significant importance in the economy.
The tertiary sector employs more than three quarters of the active workforce, it contributes more than 70% of the GDP, and is maintained by telecommunications and IT equipment

Economic Overview

The international financial crisis plunged Sweden into severe recession, as the country depends heavily on international trade. After contracting by -5.1% in 2009, Swedish economy recovered in 2010, with an estimated GDP growth of 4.4%, driven by household consumption and a resumption of international trade. The unfavorable international context suggests a slight groth in 2011.

In the context of a recovery, the government's priority, announced as part of the 2011 Budget, is to again aim for full employment. The announced measures seek to combat exclusion, improve the education system and tamper the effects of the crisis by expanding high-quality welfare services. Monetary policy will remain expansionist.

Sweden has one of the highest standards of living in the world. However, unemployment has become its curse, with one of the highest rates in Europe (8.2% in 2010 according to the estimates).

FDI in Figures

FDI flow to Sweden slowed down in 2009, due to the global recession, then recovered with the resumption of trade and this trend should continue. The country maintains a high level of appeal to foreign investors because of its multilingual and qualified workforce, its very high per capita purchasing power, its economy at the forefront of new technologies and innovation and its advantageous tax regime. The country is preceded only by Ireland, Belgium and Hong Kong in terms of per capita FDI receipt.

The government has undertaken to develop support for investments through expanding sectors (biotechnologies and food processing), as well as on rapidly growing markets (Baltic countries, India, Brazil, etc.). There are gaps in the food processing field, as well as in the housing and interior design sectors.

FDI Government Measures

Since it joined the European Union, the Swedish government has established a number of reforms to improve the business legal environment. This has enabled it to attract foreign investors and increase competitiveness.
Sweden is ranked n° 1 by the OECD in terms of public spending, especially in promoting investment.

Country Strong Points

The political and economic situation is very favorable and the quality of the business environment is good. This environment favorably influences the way companies behave in making payments. The average probability of defaulting is very low.
According to the World Bank, Sweden is amongst the world's first 10 economies in terms of facility of business undertakings. The survey takes into account the following indicators: the formation of one's own company, hiring and dismissing employees, executing contracts, loan availability, registering one's capital and investor security.
The Swedish tax system is direct and corporate tax is amongst the lowest in Europe. The country applies contribution exemptions, authorizes total tax deductions on interest, and does not have strict capitalization rules.
The legal system is balanced and ensures sound, transparent and reliable hearings. Contracts are standardized and documents are often used for simple procedures, especially for mortgages.
The quality of management and consultancy services is very high, and commercial formalities and procedures are easy to undertake.
For further information, consult the ISA website.

Country Weak Points

The country's only weak point is the high cost of manpower.

Foreign Trade Overview

Sweden is very open to foreign trade, which represents more than 90% of the GDP.The EU is reinforcing its position as primary partner. In general, half the exports are destined for the EU and the most of imports come from there. Trade with neighboring Northern Baltic countries and Russia has increased rapidly, while exports to China and India show a substantial drop. Trade in motor vehicles and metals is very dynamic. The government supports Swedish companies' activity in strategic markets. The Swedish trade balance is expected to remain in surplus, even if it has been affected by the fall in international trade caused by the effects of the financial crisis.