and iron ore constitute the resource base of an
economy that is heavily oriented toward foreign trade. Privately owned
firms account for about 90% of industrial output, of which the
engineering sector accounts for 50% of output and exports. In 1990,
agriculture accounted for only 1.2% of GDP and 1.9% of the jobs,
Sweden being about 50% sufficient in most products. In the last few
years, however, this extraordinarily favorable picture has been
clouded by inflation, growing unemployment, and a gradual loss of
competitiveness in international markets. Although Prime Minister
BILDT's center-right minority coalition had hoped to charge ahead with
free-market-oriented reforms, a skyrocketing budget deficit - about
14% of GDP in FY93/94 projections - and record unemployment have
forestalled many of the plans. Unemployment in 1994 is estimated at
around 9% with another 5% in job training. Continued heavy foreign
exchange speculation forced the government to cooperate in late 1992
with the opposition Social Democrats on two crisis packages - one a
severe austerity pact and the other a program to spur industrial
competitiveness - which basically set economic policy through 1997. In
November 1992, Sweden broke its tie to the EC's ECU, and the krona has
since depreciated about 25% against the dollar. The boost in export
competitiveness from the depreciation helped lift Sweden out of its
3-year recession. To curb the budget deficit and bolster confidence in
the economy, the new Social Democratic government is proposing cuts in
welfare benefits, subsidies, defense, and foreign aid. Sweden has
harmonized its economic policies with those of the EU, which it joined
at the start of 1995.

National product: GDP - purchasing power parity - $163.1 billion (1994
est.)

National product real growth rate: 2.4% (1994 est.)

National product per capita: $18,580 (1994 est.)

Inflation rate (consumer prices): 2.5% (1994 est.)

Unemployment rate: 8.8% (1994 est.)

Budget:
revenues: $47.9 billion
expenditures: $70.9 billion, including capital expenditures of $NA
(FY93/94)

Exports: $59.9 billion (f.o.b., 1994)
commodities: machinery, motor vehicles, paper products, pulp and wood,
iron and steel products, chemicals, petroleum and petroleum products
partners: EC 55.8% (Germany 15%, UK 9.7%, Denmark 7.2%, France 5.8%),
EFTA 17.4% (Norway 8.4%, Finland 5.1%), US 8.2%, Central and Eastern
Europe 2.5% (1