Mon, 05 Jun 2023

Cost of living pains Stockholm households: report

19 May 2023, 02:05 GMT+10

STOCKHOLM, May 18 (Xinhua) -- Businesses and households in the Swedish capital have a very gloomy outlook on the economic future, according to a report released on Thursday.

While the confidence level among businesses in Stockholm stood at 89.8 (100 is neutral), the confidence level among households for their own economy was 69, according to the report.

Dampened by the high inflation rate, the high interest rate and the weak krona, the mood is considerably more somber than usual, the Stockholm Chamber of Commerce said.

"We have a recession that households and businesses have not seen the full effect of," Andreas Hatzigeorgiou, the chamber's chief executive officer (CEO), told Dagens Nyheter (DN) newspaper.

"Commerce in Stockholm is having a very tough time. Households are having high costs, which means that they have to prioritize (their purchases) hard," Hatzigeorgiou said.

The disposable income of households is likely to shrink during the year, which will have a knock-on effect on consumption, according to the report.

This increases the risk of layoffs in the trade sector, which risks exacerbating the problem, he said.

"If the layoffs in the trade sector continue, there is a risk that the social problems might worsen," he added.

Construction companies also have a gloomy outlook on their economic future, Hatzigeorgiou said. "To avoid a too deep slump and thereby risk losing competence and resources for construction, the state and local municipalities should increase the pace in other types of investments."

In total, 1,078 businesses and 362 households responded to the quarterly survey conducted jointly by the Stockholm Chamber of Commerce and the National Institute of Economic Research (NIER).

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