Sweden's economic growth is set to be somewhat stronger than previously thought this year while inflation is set to surge and hamper growth next year, the National Institute of Economic Research (NIER) forecast on Wednesday.
The Swedish think tank now expects the Nordic country's economy to grow by 2.4% in 2022, up from its previous forecast given in June for 1.9% and down from 5.1% growth last year.
In 2023, GDP will grow by just 0.5%, NIER predicted, down from 1.2% seen in the June forecast.
It forecast headline inflation will average 7.2% this year, up from 6.8% seen in June, before easing to 3.4% in 2023.
"Pressured households will cut back on consumption this fall and winter, which contributes to the Swedish economy entering a low growth phase next year," NIER said.
Prices of food and energy are closely watched ahead of the general election on Sept. 11, with several political parties proposing different measures to ease economic pain for households. (Reporting by Johan Ahlander, editing by Terje Solsvik)