Country Report: Sweden.

The article presents a political and economic outlook for Sweden for 2006-2007. The Social Democratic Party (SAP) is expected to continue as a minority single-party government until the general election in September 2006. The prime minister, Goran Persson, has indicated that the SAP would be open to the possibility of a formal coalition with one, and possibly both, of the support parties. The 2006 budget had an electoral slant, detailing income tax cuts and sizeable increases in expenditure targeting the promotion of small businesses, the labor market and social care. The real GDP growth is forecast to accelerate from 2.7% in 2005 to 3.4% in 2006, before slowing slightly to 3% in 2007.