Sweden’s government is preparing for potential economic fallout from the ongoing conflict in the Middle East, outlining a range of possible responses to protect the nation’s financial stability.
– Don’t be afraid. We are prepared for what is happening now,” said Swedish Prime Minister Ulf Kristersson during a press conference Thursday.
– We have the financial strength to act if this has a dramatic impact on the Swedish economy,” he continued.
Alongside Finance Minister Elisabeth Svantesson, he presented three different scenarios:
- The mildest: the war ends within days, and oil prices return to pre-conflict levels of $60–70 per barrel. This would have a minimal impact on the Swedish economy.
- The base scenario: assumes the war lasts several weeks, with oil prices at $80–90 per barrel before gradually normalizing. This would have a limited impact on the country’s economy.
- The most serious: an escalated regional conflict that severely impacts energy infrastructure. Oil prices could then rise to $120 per barrel for an extended period, which would have clear negative effects on the Swedish economy, reduced purchasing power, and higher interest rates.
