Sweden's GDP contraction worsens amidst economic gloom.

Sweden's Ministry of Finance predicts a deeper than expected GDP contraction of 1% in 2023 due to a challenging economic environment, worsened by high inflation rates, eroding real wages, and plummeting house prices. The European Commission also predicts negative GDP growth for Sweden in 2023. While inflation rates are starting to cool, Swedish households are unlikely to get much reprieve from the figures, and real wages are lagging behind. Danish Bank recently revised its estimate of a 20% drop in real house prices to a 25% drop, leaving prices still only halfway to the bottom.