Treasury Today Country Profiles in association with Citi


With low unemployment, a robust economy and a reputation for neutrality, Sweden is among the most highly developed post-industrial societies in the world today. The country experienced a surprisingly strong rebound from the global recession and in 2010, the Swedish government successfully managed to clear its deficit. Sweden is one of the few EU countries that has not adopted the single European currency.

Map of Sweden

Key facts

Official country name:
Kingdom of Sweden
Krona (SEK)
Capital city and financial centre:
Other major cities:
Goteberg, Malmö, Uppsala
Time zone:
UTC +1
9,088,728 (July 2011 est)
Population growth rate:
0.163% (2011 est)
GDP per capita (US dollar equivalent):
$39,100 (2010 est)
GDP real growth rate:
5.5% (2010 est)
Government type:
Constitutional monarchy with unicameral parliament
Head of State:
King Carl XVI Gustaf
Political leader:
Prime Minister Fredrik Reinfeldt
Top export partners:
Norway, Germany, UK, Denmark and Finland
Top import partners:
Germany, Denmark, Norway, Netherlands and the UK

Economic overview

Similar to its Nordic counterparts, Sweden has an export-orientated market economy. Heavily reliant on the export of cars, construction materials and telecommunications, the country’s economy began to suffer towards the end of 2008 as global demand dropped. In 2009, GDP fell by 4.9% and the unemployment rate rose to over 8%.

Nevertheless, strong exports of commodities and a return to profitability by Sweden’s banking sector drove a rebound in 2010, which saw unemployment fall from 8.3% in 2009 to 7.8% in September 2010. In fact, in Q4 2010, the country posted year-on-year growth of 7.3%, the highest growth noted by the national statistics agency since it began quarterly monitoring in 1970. Current government predictions suggest that Sweden’s GDP will grow by 4.2% in 2011. The country’s export market is also expected to grow by approximately 8% each year until 2013.

The centre-right government has been praised for its prudent pro-market policies and for keeping public debt at low levels, reflected in the country’s credit rating. Commenting in mid-July 2011, Douglas Renwick, Director of Fitch Rating’s Sovereign group said: “The affirmation of Sweden’s ‘AAA’ rating reflects its strong budgetary position, low public debt and good governance. Public debt was just below 40% of GDP in 2010, compared with 80% for the EU as a whole.”

Despite joining the EU in 1995, Swedish voters turned down entry into the euro system in 2003 as they were concerned about the impact on the country’s economy and their sovereign status.

The banking sector

As at 31st December 2010, there were 114 banks operating in Sweden:

  • 33 Swedish commercial banks.

  • Three foreign commercial banks.

  • 26 foreign bank branches.

  • 50 savings banks.

  • Two co-operative banks.

The major Swedish banking groups include:

Banking group Balance sheet total (SEK m)
Nordea 5,207,512
SEB 2,179,821
Svenska Handelsbanken 2,153,530
Swedbank 1,715,681

The Riksbank is Sweden’s central bank and has one clear objective – to ensure that inflation is low and stable. The Riksbank Bank policy is guided by inflation targeting to keep the Consumer Price Index (CPI) at or around 2% on an annual basis. Additionally, the Riksbank issues banknotes and coins and manages Sweden’s reserves of gold and foreign currencies.

All companies operating in the Swedish markets are supervised and monitored by the Swedish Financial Supervisory Authority, otherwise known as the Finansinspektionen (FI). The FI’s supervisory role covers two main aspects: prudential supervision and market supervision, which also involves measures to prevent money laundering.

Payments and clearing

System Clearing type Transaction types Value dates Times
RIX RTGS High-value payments Same day, immediate finality 07:00 – 17:00 CET
Bankgirot ACH Low-value, non-urgent SEK and EUR payments Usually same day, some next day

Latest 14:25 CET (same day)

Latest 19:00 CET (next day)

PlusGirot (Nordea) Proprietary Low-value payments Usually same day, some next day

Latest 15:00 CET (same day)

Latest 19:00 CET (next day)

  • Credit transfers are the predominant method of making corporate payments and the vast majority of credit transfers are carried out electronically, although a few are still paper-based.

  • Payment cards are the most popular retail payment instrument in Sweden in terms of volume. Debit cards have gained most traction in the country. Between 1999 and 2009, the number of card payments increased from 255m transactions to 1,697m.

  • Cash transactions have decreased on the back of increased payment card usage but cash remains popular for transactions below SEK 100.

  • E-invoicing is increasingly popular, its usage in the country hit new records in 2010, with 47m e-invoices being sent.

  • Direct debits are increasing in usage for both B2B and B2C transactions.

  • Cheque usage has diminished significantly and volumes are negligible.

Electronic banking is normal practice in Sweden with internet banking widely available. Sweden does not intend to migrate to the pan-European TARGET2 RTGS system.

Investment options

  • Current accounts.

    Interest is usually paid on account surpluses.

  • Time deposits.

    Maturities range from three months to a maximum of two years, with 12 months being the most common.

  • Certificates of deposit.

    These are rarely issued in Sweden as the rates are typically low. Minimum investment amounts usually range from SEK 1,000 to SEK 50,000, depending on the issuing bank.

  • Treasury bills.

    Popular among companies for short-term investment, government securities are issued by the National Debt Office. Maturities range from three to 12 months.

  • Commercial paper.

    Both issued by companies and invested in by companies, there is a significant secondary market for CP in Sweden.

  • Money market funds.

    Offered by some commercial banks, but not all.

  • Repurchase agreements.

    Widely used by both corporates and FIs in Sweden but interest rates vary depending on demand.

  • There are no foreign exchange controls in Sweden.

  • Corporation tax is levied at 26.3% (2011 figure).

  • Sweden levies no withholding tax on interest payments. Royalty payments to residents also carry no withholding tax, whereas royalty payments to foreign recipients may be taxed at the corporate rate. Withholding tax of 30% applies to dividends paid by a Swedish company to a foreign company, although the rate may possibly be reduced under the EC parent-subsidiary directive. Alternatively, a company may be exempted from paying withholding tax on dividends under a tax treaty or the domestic participation exemption.

  • Transfer pricing.

    The Swedish authorities require supporting documentation of transactions obeying the arm’s length principle.

  • Thin capitalisation.

    From the start of 2009, deductions of interest on loans used to acquire intragroup shares are not permissible, unless the lender pays a levy of at least 10% or can transparently show that the borrowing was for business purposes only. No other specific rules are in force for thin capitalisation.