Refugee crisis could boost Swedish economy

Experts from Nordea said on Monday that while there was still "considerable uncertainty" surrounding the long term impact of the refugee crisis, Sweden's economy was not likely to be damaged in the wake of the influx of new arrivals and could even receive a boost.

 

In a major report, the bank said that GDP growth could rise by 0.5 percent more than previously predicted in 2016.

 

It linked the increase to a variety of factors, from the need for additional accommodation making more money for the building industry to more teachers being hired to help teach refugees.

 

The bank said that employment would be pushed up slightly in the wake of the influx of new arrivals, but explained that it would take time for this to happen.

 

"A clear impact on the labour market is delayed (...) probably until 2017," said Nordea's chief analyst Torbjörn Isaksson in the report for Nordea, which is among the largest banks in the Nordics.

 

However he also warned that government spending was set to rise as Sweden attempts to provide both shelter and public services for the 300,000 people expected to arrive in the country by the end of 2016, according to estimates from Sweden's Migration Agency.

 

Isaksson said it would "become harder for the government to manage tight spending limits for another year".

 

He also argued that the Swedish government needed to plough resources into helping those given asylum in Sweden to find jobs.

 

"The importance of integrating foreign-born persons in the labour market can not be stressed enough," he concluded.

 

Nordea's report follows figures released by the Swedish employment agency (Arbetsförmedlingen) last week which revealed that more than one in five foreign-born people in Sweden are currently without a job.

 

"It is of course a challenge for Arbetsförmedlingen, because so many of those come to us are quite far from the labour market. They have a longer distance to go to be able to get a job, and require more assistance," the authority's chief analyst Mats Wadman told the TT newswire at the time.

 

But he also reflected on the positive impact that migrants could have in the future.

 

"At the same time it's an opportunity, because we do need some labour immigration," he said.

 

Sweden was criticized by the International Monetary Fund (IMF) earlier this year for having one of the highest differences in employment levels between natives and immigrants in the OECD area (Organization for Economic Cooperation and Development).

 

Prime Minister Stefan Löfven has previously insisted he will achieve his goal of Sweden having the lowest unemployment rate in the EU by 2020. However, Finance Minister Magdalena Andersson noted in a recent interview with the Svenska Dagbladet newspaper that his promise was looking increasingly "harder to reach".