LONDON
Sweden is widely seen as a proud, stable, and prosperous society with a generous welfare system, but in reality, the Nordic country now has one of the worst-performing economies in Europe, according to experts.
Signs of poverty are mounting amid the highest level of inflation the country has seen in more than 30 years, as it has increased to 12%, according to official statistics released last month.
Low-income households have been hit hard by rising bills and increases in food prices that have jumped by “40% over the last two years.”
The country’s highly indebted middle class is struggling to cope with the cost of living and to meet skyrocketing mortgage payments.
Meanwhile, the number of homeless people queuing for food in the country’s capital Stockholm is growing day by day, warned local charities.
“So, we actually have poverty in Sweden in a way that we have not seen before,” Annika Alexius, an economist at Stockholm University, told Anadolu.
According to her, Swedes are struggling to provide food for their children, which indicates poverty in “substantial layers of the population.”
Many people are forced to turn to discounted food stores as they can no longer afford to shop in regular supermarkets.
According to the Red Cross, around one in eight low-income single-parent households are struggling to feed their children and have gone hungry.
But its officials also say that it is no longer only those who are the most vulnerable that need help with living costs as Swedes from all walks of life are struggling, including middle-income families with children and elderly people, according to local media.
Marianne Orberg, a 73-year-old former lawyer, goes to a Red Cross shop twice a week to buy food there at reduced prices.
“Organizations such as the Red Cross and also food chains sell goods with a due expiry date cheaper at special places at certain times. I think it's a good way to make the money last longer,” Orberg told Anadolu.
She noted that people have changed their eating habits to cope.
“I cook with cheaper ingredients” and “I eat less often in restaurants, go to the cinema and theater less often, and travel less,” Orberg said.
Despite not being among “the worst off,” her pension is simply not enough to cover her living costs.
“I have two homes – a rental apartment and a holiday home – and the increased cost of living means that my pension is not enough,” she said, adding that she has to spend her savings to meet her needs.
The first wave of inflation was just energy prices and “some import prices,” but now “the entire economy" is affected, said Alexius.
Hit by recession
The economist predicts that the Nordic country is experiencing a downturn that will essentially lead to a recession.
The ever-rising electricity bills and surging food costs are taking their toll on Sweden just like on the rest of the world.
However, the country is worse off than others due to “a weakened floating exchange rate.”
Most of the food in Sweden is imported, hence the weak exchange rate has caused prices to skyrocket.
Sweden’s currency, the krona, is weaker than it has ever been against the euro, and an interest rate increase has left many families unable to meet huge mortgage payments, said Alexius.
With the war in Ukraine and energy prices increasing, there are “supply shocks” that drive inflation in Sweden and internationally, she said.
But according to the European Commission's most recent forecast, the country is expected to be the only EU member to enter a recession in 2023.
Alexius suggested that Sweden will be experiencing a recession earlier than other European countries, but other EU states will be experiencing “a worsening situation.”
Inequality on the rise
Sweden has long been considered a socialist state that is known for its generous welfare system, but now nearly 15% of Swedes are at risk of poverty, according to data from Statistics Sweden.
Alexius pointed out that the high levels of inflation are contributing to the “huge rise in inequality.”
In the past 30 years, the welfare system has been steadily cut back, causing the wealth gap between rich and poor to rise significantly.
In the last two years, Sweden’s ranking in terms of inequality has dropped 10 places from 10 to 20, according to Oxfam’s 2022 Commitment to Reducing Inequality (CRI) Index.
In 2017, Sweden was ranked best in the world at combatting economic inequality, but since then, it has ranked lower and lower in every Oxfam report.
Oxfam warned that the gap between the wealthy and poor continues to grow in the Scandinavian country and that Sweden is an Organization for Economic Cooperation and Development (OECD) country “where economic inequality has increased the most in recent decades.”
