(April 22): The jobless rate jumped last month in Sweden and Finland as a weaker global outlook undermines the recovery in two of the European Union’s worst-performing labour markets.
Sweden’s seasonally adjusted unemployment rate grew in March to a five-month high of 9.2%, above all estimates in a Bloomberg survey of economists, according to data from Statistics Sweden on Wednesday. Finland’s headline jobless rate rose to 11.1%, the highest reading since May 2015, its statistics office said.
The data comes just as the war in the Middle East is adding uncertainty in the two export-driven Nordic economies, with an expected rise in energy prices increasing the risk of denting their upturns and delaying labour market improvements. Finland had the EU’s highest unemployment rate in February, with Sweden the fourth, according to Eurostat data.
Both the European Central Bank and the Riksbank of Sweden are considering whether to raise borrowing costs, potentially adding stress for households in the two Nordic countries where the majority of mortgages have variable interest rates.
The situation in Sweden, where an economic recovery already took hold in 2025 after several years of near-stagnation, is still somewhat less gloomy. The Swedish statistics office pointed out the March unemployment reading “should be interpreted with some caution” as “there may be an underestimation mainly of employed people and some overestimation of the unemployed”.
See also: France sees up to €6 bil budget impact from Iran war
“We don’t expect the LFS unemployment rate to remain at this level for long,” Swedbank AB’s analyst Emma Paulson said in a note to clients, pointing out that increases in the number of temporary employees and in hours worked suggest continued underlying improvement.
“Taken together, we expect the labour market to continue to improve at a slow and gradual pace going forward,” she said.
In Finland, consumer confidence has already been weakened by Russia’s invasion of Ukraine, the subsequent inflation spike and years of relatively high mortgage costs.
See also: Stellantis eyes Dongfeng carmaking deal in Europe, China — Bloomberg
Finland's Prime Minister Petteri Orpo’s government, which took office in June 2023, has sought to plug a widening fiscal deficit through cuts to social benefits. These measures are prompting households to increase precautionary savings while also encouraging greater labour market participation, thereby expanding labour supply and lifting the jobless rate.
The Finnish government is currently in talks over a spending plan for the next four years and is expected to present the outcome on Wednesday evening. It aims to complete a €10 billion savings programme to strengthen public finances by the 2027 general election.
Uploaded by Arion Yeow
