Europe's most troubled economy named

Europe's most troubled economy named
Photo by Steve Johnson / Unsplash

Analysts of the European Commission (EC) have named Sweden the only country in the European Union whose economy will shrink in 2023, Bloomberg reports.
The status of the most troubled economy in Europe Sweden has received because of the sharp decline in the housing market, which led to the bankruptcy of hundreds of companies. In addition, the country is experiencing high inflation, which, combined with an increase in the key rate has caused a decline in consumer and business activity.
According to the European Commission's forecast, Swedish GDP will shrink by 0.8 per cent in 2023 and grow by 1.2 per cent in 2024. At the same time, in November, the EC expected a downturn in Europe's largest economy - Germany. However, in the current forecast, analysts have changed their view, predicting GDP growth of 0.2 per cent in Germany in 2023.
The decline in housing values in Sweden in 2022 was 16 per cent from the first quarter 2022 peak, a 30-year record. As a result, some 130 property developers in the country declared themselves insolvent in January.

The crisis is expected to lead to a sharp drop in the rate of new house building and hit employment in an industry that employs more than 350,000 people. In addition, the downturn in the housing market will affect economic activity in Sweden, resulting in a further decline in GDP.