Many municipalities and county councils in Sweden will find it difficult to finance investments in childcare, school, health care and care for the elderly, predicts Nordea, one of the largest banks in Europe, in its new economic and regional outlook.
By – Brünnhilde
According to the report, the proportion of people who are at working age will end up at its lowest level in at least 50 years.
“The golden years in the labor market are over,” was the clear message presented by Nordea in its economic outlook Regional Outlook today.
According to the report, the proportion of young and elderly in Sweden’s population will rise to the highest levels of at least 50 years in the next eight years. But more worringly the population of people who are able to work will also reach its lowest level. This is due to the major demographic changes in the country.
For years, politicians have claimed that Sweden needs immigration to save welfare and care for the elderly. However immigration has contributed to an unbalanced demographic with more elderly and children, and fewer people working.
SvD wrote that Sweden has experienced “several years of record high immigration” which has increased the population of the country so much so that the head of the Institute of Economic Research, Urban Hansson, warned of a “demographic challenge” which has forced municipalities to raise taxes to cope with the added welfare.
“The proportion of working age is at its lowest level for at least 50 years in all regions by 2025. It is also a new normality that is expected to last in the coming decades,” said Nordea senior analyst Susanne Spector.
Many municipalities and county councils will therefore find it difficult to finance much-needed investments in childcare, school, healthcare and elderly care that are required as the number of young and older increases rapidly, according to Nordea.
“If these are financed by increases in municipal and county taxes, it may reduce the number of hours worked and thus further complicate funding,” the bank writes.
“Improved integration and heightened productivity should be at the top of the agenda for the next government if we are able to meet the population changes in a successful way,” said Spector.
According to Nordea, the economic outlook is now also deteriorating, especially in Stockholm. In conjunction with Europe, Sweden will enter a new phase, with domestic demand slowing down, while the global upswing will push the export industry. The decline in the housing market is most apparent in the Stockholm and Mälardal region.
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Read more: From 2018/03/08