STOCKHOLM (Reuters) - Sweden's economy will grow more slowly than previously expected, hit by the effects of inflation and the war in Ukraine, the government said in a new forecast published on Wednesday.
Businesses and households bounced back quickly from the effects of the pandemic, but the war in Ukraine has extended problems with supply chains and sent already high energy prices soaring, pushing up inflation across the board.
Sweden's economy had already begun to slow, contracting 0.8% in the first quarter and the effects of inflation, rate hikes and falling global demand will have an increasingly negative effect this year.
"We can expect tougher times ahead," Finance Minister Mikael Damberg told reporters during a news conference.
Gross domestic product is expected to grow 1.9%, the Finance Ministry said compared with the 3.1% predicted in the previous forecast in April.
GDP growth was seen at 1.1% in 2023, down from 1.6% seen previously.
The downgrade to economic growth forecasts was in line those made by a number of other organisations.
(Reporting by Simon Johnson, editing by Terje Solsvik)