Sweden Business Projection Industry Update Quarter 2 2012

Executive Summary 5
Core Views 5
Major Forecast Changes 5
Key Risks To Outlook 5
Chapter 1: Political Outlook 7
SWOT Analysis 7
BMI Political Risk Ratings 7
Domestic Politics 8
Battle Lines Being Drawn As 2014 Election Looms 8
With the left-wing opposition parties in the ascendancy in public opinion polls, Prime Minister Fredrik Reinfeldt's ruling coalition faces
being dethroned in 2014 after two consecutive election wins in 2006 and 2010 However, the September 2014 election will be closefought,
and the battle lines are now being drawn
TABLE: POLITICAL OVERVIEW 8
Long-Term Political Outlook 9
Stability Assured Over Long Term 9
With a long-term political risk rating of 94 5 (out of 100), Sweden is rated among the most structurally stable countries in the world
Benefiting from an advanced level of institutional development, a long history of democratic governance and an established foreign
policy based on neutrality, the country faces limited underlying risks to political stability over the long term
Chapter 2: Economic Outlook 11
SWOT Analysis 11
BMI Economic Risk Ratings 11
Economic Activity 12
Recession Averted, But Growth To Remain Weak 12
Our real GDP growth forecast for Sweden in 2013 is 1 0%, down slightly from our previous 1 2% projection While the 2012 data are
mixed, we believe that Sweden's economy has managed to avoid recession and is set to improve as 2013 proceeds
TABLE: GDP CONTRIBUTION TO GROWTH 12
TABLE: GDP BY EXPENDITURE 13
Monetary Policy 15
Rate Cut To Come In 2013 15
We continue to forecast a 2013 year-end Swedish Riksbank repo rate of 0 75%, representing one further 25 basis point cut from the
present level of 1 00% With the currency remaining strong, and the economy showing only mixed signs of growth, inflationary risks are
minimal
TABLE: MONETARY POLICY 15
Balance Of Payments 16
Exports To Remain Sluggish, But Worst Is Over 16
Sweden's external accounts are among the most robust in the developed world, with the current account set to remain above 6% of
GDP for the next few years The strong currency means that import growth will continue to outpace export growth for the foreseeable
future, however
TABLE: CURRENT ACCOUNT 17
Chapter 3: 10-Year Forecast 19
The Swedish Economy To 2022 19
Well Positioned For The Long Term 19
Sweden is among the most strategically well-positioned economies in the developed world, and this is reflected in our 10-year growth
forecasts for steady expansion through to 2022 The balance of payments are extremely stable and will be buoyed by a robust current
account surplus, fiscal dynamics are among the best in Europe, and the country will continue to benefit from a highly productive
workforce over the long term
TABLE: LONG-TERM MACROECONOMIC FORECASTS 19
Chapter 4: Business Environment 21
SWOT Analysis 21
BMI Business Environment Risk Ratings 21
Business Environment Outlook 22
Institutions 22
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS 22
Infrastructure 23
TABLE: BMI LEGAL FRAMEWORK RATING 23
TABLE: LABOUR FORCE QUALITY 24
Market Orientation 25
TABLE: TRADE AND INVESTMENT RATINGS 25
Operational Risk 26
Chapter 5: Key Sectors 27
Metals 27
TABLE: STEEL PRODUCTION & CONSUMPTION ('000 TONNES, UNLESS STATED OTHERWISE), 2009-2017 28
Other Key Sectors 29
TABLE: FOOD & DRINK SECTOR KEY INDICATORS 29
TABLE: AUTOS SECTOR KEY INDICATORS 29
TABLE: PHARMA SECTOR KEY INDICATORS 29
TABLE: TELECOMS SECTOR KEY INDICATORS 30
Chapter 6: BMI Global Assumptions 31
Global Outlook 31
Past The Major Obstacles To Recovery 31
TABLE: GLOBAL ASSUMPTIONS 31
TABLE: DEVELOPED STATES, REAL GDP GROWTH FORECASTS 32
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS (%) 32
TABLE: EMERGING MARKETS, REAL GDP GROWTH FORECASTS 33

Accounting and Corporate Finance in Sweden