Учебно-методическое пособие по работе с темой "COUNTRY PROFILE". Дедова С.А. - 34 стр.

balancing the budget in 1998, will not be compromised and that the excel-        we believe that the inventory cycle came to an end in the fourth quarter and
lent fundamentals will eventually re-assert themselves.                          that inventories are likely to lend support to growth in 1997. Our strongest
       Let's start with a bit of history. The currency and bond relative         dissension with the consensus remains in the area of private consumption,
weakness since the beginning of the year began when PM Persson an-               where we are looking for an expansion of 2.5 %, led by a strong gains in
nounced that new calculations by the ministry of finance suggest that there      real disposable income and stronger household balance sheets.
will be a budget surplus of around SKr 10 billion in 1998. The PM then                   Inflation: The outlook is the best in Europe. Following the January
stated that it is his government's intention to spend this surplus on educa-     and February results, we are revising down the 1997 CPI average to 0.5 %
tion, health-care and welfare. These comments came as a shock to the             from 1.3 %. Although inflation will be drifting higher in the course of this
market. Until then, Mr. Persson's name had been associated with fiscal rec-      year and next, CPI inflation is unlikely to pose a threat to the Riksbank's
titude. As a prime minister, however, he left fiscal rectitude in the hands of   inflation target of 2.0 %. More importantly, the upcoming wage negotia-
his finance minister, Mr. Åsbrink. Mr. Persson's efforts are now focused on      tions should be marked by a considerable downward shift in inflationary
improving the fortunes of the SDP. Hence, when taken against the back-           expectations. In fact, the 2.6 % agreement in the forestry sector was a step
drop of an election in September 1998, these comments should not have            in the right direction and, more importantly, a good benchmark for future
come as a surprise. The SDP is lagging in the opinion polls, with tradi-         wage negotiations. Although some participants are already warning about
tional SDP voters deserting the party in favour of the far left, and the au-     the inflationary consequences of the weak krona, we believe that risks so
tumn has been marked by popular demonstrations.                                  far are likely to be limited to 0.3 % in the long-run if the krona remains at
       Looking ahead, a key risk on the horizon is the upcoming spring bill      current levels. Given our expectation of a krona recovery, this is not our
on 15 April. Under the new budget regime, the April budget statement             base case scenario.
should contain all the key guidelines and expenditure ceilings for 1998.                 Current Account: The rise is accounted for by a favourable trade
The September budget will only serve to fill in the gaps. Given the political    performance. The trade surplus reached SKr 120 billion in 1996 led by a
calendar over the next 18 months, the 15 April presentation is likely to be      continued favourable competitiveness and a relatively strong growth in
an election budget. Hence, market participants should not have high expec-       the global economy. With Europe witnessing a cyclical snapback, we be-
tations. At the end of the day, the SDP's commitment to welfare should           lieve that Swedish external balances will continue to rise this year. We es-
never be put in doubt. In our view, as long as the finance minister does not     timate the current account to reach SKr 55 billion this year (3.2 % of GDP)
compromise the objective of budget balance in 1998, there should be little       and SKr 65 billion in 1998 (3.6 % of GDP).
damage to confidence in policy-making. In relative terms, Sweden's public                In summary, public finances are important for the credibility of
finances remain far better than most of Europe's, including all EMU first-       overall economic policies. Ideally, a stringent budget bill on 15 April
round aspirants.                                                                 would restore the lost credibility. Realistically, given the political calendar,
       Looking beyond the spring bill, we believe that the economic fun-         we would settle for a budget that respects the original objective of budget
damentals will eventually reassert themselves. As we highlighted before,         balance in 1998. We believe that the fundamentals always win in the end.
in our view Sweden's economic prospects are among the best in Europe:            Hence, once the spring bill is out of the way, we believe that the krona will
       Growth: The latest GDP report showed fourth-quarter GDP growth            stabilise and retrace its lost territory. A stronger krona could open the way
of 1.1 % QoQ. For the year as a whole, GDP expanded 1.1 % in 1996. Al-           for further rate cuts.
though this final result was well below our forecast of 2.0 %, the shortfall
is accounted for by a big inventory drawdown to the tune of 1.0 % of GDP.        1) Look up in the dictionary the Russian equivalents of the word written in
Hence, it may be useful to point out that 1996 final sales, defined as GDP       a bold type.
less inventory changes, were up 2.1 %. The GDP data were consistent with         2) Answer the following questions:
our expectations of acceleration in growth to 3.3 % in 1997. We are look-               a) What is the general idea of Sweden economy? Does it differ from
ing for strong growth in exports and investment to continue. Furthermore,                  the author’s understanding?

                                     67                                                                                68