Only Sweden but this got lost in last weeks shuffle..."Sweden Slashes Growth Forecast"
(gdp about $500bil?)
online.wsj.com
By CHARLES DUXBURY HARPSUND, Sweden—Sweden's finance minister Friday significantly cut forecasts for the country's economic growth, saying that the economy will be hampered by the debt crises affecting Europe and the U.S.
The government now sees gross domestic product growth in 2012 at 1.3%, down from a forecast of 3.8% in April.
"We're are in the middle of a debt storm," Finance Minister Anders Borg said, adding that uncertainty is great and that risks for a weaker development dominate. "We have faced a barrage of risks during the spring. Now we must now build barricades."
Mr. Borg said public finance must not be a source of instability.
He said money for reform was limited and now would be 10 billion kronor ($1.58 billion) to 15 billion kronor in 2012 from previous forecasts of 30 billion kronor. "Anyone who wants to spend more must say which taxes they want to raise," he said.
Tommy Waidelich, economic spokesman for the Social Democrats, the largest opposition party, has called for more money to spend on education and infrastructure.
Sweden's economy has shown strong growth over the last year, bouncing back from a recession in 2009. But with uncertainty growing about public finances in key markets like the U.S. and Europe, concern is growing about the effect this will have on export-dependent Sweden.
Mr. Borg said he expects that the unemployment rate in 2011 will be 7.5% compared with previous expectations of 7.3%. In 2012 it will rise to 7.8%—higher than the 6.6% seen in April.
He forecast that Sweden would deliver a balanced budget in 2012, instead of a previous forecast for a surplus of 1.8% of economic output.
Commenting on the Swedish finance ministry's revised economic forecast, Swedbank economist Knut Hallberg said Mr. Borg had moved from one extreme to another.
"This spring Borg was too optimistic about the Swedish economy, and now I would say he is too pessimistic," Mr. Hallberg said.
He added that Mr. Borg's more downbeat view carries political significance. By damping the mood and limiting the forecast economic surplus, he "avoids conflict about how to use available resources, both within between the ruling parties and in parliament." Swedbank expects GDP to expand at "around 2%."
The Swedish krona fell against the euro after the revisions. By late afternoon in Europe, the euro was trading at 9.1305 from 9.1050 before.
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