Sweden Thrives on Exports One Year After Voters Reject the Euro

A year after Swedish Prime Minister Goeran Persson told voters his country needed the euro to compete in world markets, the Swedish economy has done a good job of proving him wrong. The National Institute of Economic Research in Stockholm last month raised its economic growth forecast to 3.5 percent this year and 3 percent in 2005. A global expansion has boosted demand for Swedish exports while worker productivity has increased faster than in the 12 countries sharing the euro, which 56 percent of Swedish voters rejected on Sept. 14, 2003. Swedish and international companies are betting on Sweden. Last month, for example, Atlet AB said it would close its forklift plant in Oberhausen, Germany, and move about 30 jobs to its factory in Moelnlycke, Sweden. Second-quarter foreign direct investment in Sweden jumped to a net 19.9 billion kronor ($2.7 billion), after a year-earlier outflow of 31.4 billion kronor. The European Central Bank expects the economy of the euro region to expand about 1.9 percent this year and 2.3 percent in 2005. By one study, Sweden ranks second in the world in productivity. Sweden, a nation of 9 million people that joined the European Union in 1994, accounts for 2 percent of the bloc's population and 2.7 percent of economic production. Its economy has grown faster than that of the euro region for eight of the past 10 years.