riks, RIX-INST, commercial paper

Prosperity growth in Sweden compares well with other countries

Since the financial crisis, prosperity has had weaker development in many countries, including Sweden. The weak development in Sweden over the past three years has led to a discussion of how prosperity in Sweden compares with that of other countries. This Economic Commentary reviews different measures of prosperity and compares developments in Sweden with other countries. The results show that prosperity in Sweden has held up well in recent years, but as in many other wealthy nations, there are challenges.


Prosperity can be measured in many different ways. The way that Sweden’s development is assessed in relation to that of other countries depends on which measure one chooses, and which time period one measures. Most measures of prosperity try to capture developments in national standards of living based on data from the National Accounts. One of the most common measures is GDP per capita (GDP per inhabitant). GDP totals the value of the goods and services produced in a country during a specific period of time, which is synonymous with a country’s total income during a period of time. To obtain a rough measure of how wealthy a country is, its prosperity, one needs to relate the GDP figure to the size of the population. For countries with substantial foreign trade, such as Sweden, it is also important to adjust GDP per capita to changes in relative prices of imports and exports (the current account).

There are several factors that are important to the development of national prosperity. Developments in labour productivity, demographics, labour force participation rate and current account are some of the important components. The fact that income growth has been lower in Sweden since the financial crisis is mainly due to productivity growth being slower and to a smaller share of the population being of working age (poorer demographic development).

The Economic Commentary “How does prosperity growth in Sweden compare with other countries?” shows that Sweden has a relatively high level of prosperity, although the level has fallen slightly in relation to other countries in recent years.