Credit Guarantee Experience
We are open for cover in this market without any restrictions.  Our exposure is reasonable and we have a favourable experience in dealing with this market. Exporters on open account should not overlook the fact that any market is not risk free and given current economic conditions they would be prudent in taking measures to protect themselves accordingly.

Trade Data:
Main exports: machinery, motor vehicles, paper products, pulp and wood, iron and steel products and chemicals.
Export partners: Germany 10.4%, Norway 9.4%, US 7.6%, Denmark 7.4%, UK 7.1%, Finland 6.4%, Netherlands 5.1%, France 5% and Belgium 4.6%.
Main imports: machinery, petroleum and petroleum products, chemicals, motor vehicles, iron and steel, foodstuffs and clothing.
Import partners: Germany 18.4%, Denmark 9.2%, Norway 8.3%, UK 6.8%, Finland 6.1%, Netherlands 5.8%, France 5%, China 4.3% and Belgium 4.1%.
Trade with South Africa
South African exports to Sweden totalled R2.9bn in both 2006 and 2007 and reached R785.3 million in the year-to-March 2008. SA’s main exports to Sweden consist of industrial products, food (especially fruit, vegetables and wine) and various semi-manufactured products. Imports from Sweden totalled R5.9bn in 2006, R8.1bn in 2007 and R3.2bn in the year-to-March 2008 and they consist mainly of industrial products, vehicles and various semi-manufactured products. The number of Swedish companies based in South Africa has grown steadily since 1993 and was estimated at 80 in 2007, among them major multinational export companies such as ABB, Atlas Copco, Electrolux, Ericsson, Volvo, Scania, Svedala, Tetra Pak and Sandvik.

Developments
 Chief of state is King Calt XVI Gustaf and the monarchy is hereditary. Head of government since October 2006 is Prime Minister Fredrik Reinfeldt. A four-party rightwing Alliance government was elected in September 2006, replacing the Social Democrats who ruled for the previous 12 years. Despite losing support in the opinion polls, the four-party centre-right coalition is likely to remain united behind a comprehensive policy programme. The fortunes of the Alliance at the next election, due in 2010, are heavily dependent on the success of its widely publicised programme to make work a more attractive option than welfare dependency. The government will continue to emphasise employment and market liberalisation measures with tax cuts for low-and middle income earners. The global economic slowdown is starting to hit Sweden and could put a dent in planned reforms by the country’s rightwing movement ahead of the next general election.
 The population of Sweden is estimated at 9.1 million. The cost of care in Swedish hospitals is expected to increase by 270% by 2040 due to an aging population. By 2040 the number of people over 65 will have increased from today’s 17% to 24%.
 The economy grew by 2.8% in 2007. As a very open economy Sweden is feeling the effects of the global slowdown. The central bank cut its economic growth forecast for 2008 to 2.1% from its initial estimate of 2.6% due to weaker consumer spending and exports. In 2009, the economy is expected to expand by 1.2%. Household consumption is forecast to fall from 2.8% in 2008 to 2.6% in 2009 while export growth is expected to fall from 5.5% in 2008 to 4.8% in 2009.  These may prove optimistic.
 The central bank is facing the same conundrum being faced by other central banks - rising prices and slowing growth. The bank has had 12 successive interest rate increases, a tightening cycle that started in 2006. In December 2008 the Riksbank lowered the repo rate by 1.75 percentage points to 2% as part of coordinated effort by several central banks, adding that it believed the Swedish economy was slowing and inflationary pressures were dampening as a result of the financial crisis. Inflation is estimated at 3.7% in 2008 and 2.1% in 2009 and it’s not expected to reach the 2% target until September 2010.
 The Swedish government has set aside $1.5bn kronor ($211 million) for unemployment support after several large industries announced job cuts among them Volvo, Ericsson AB and TeliaSonera, Sweden’s biggest phone operator. The layoffs are expected to raise the unemployment rate in Sweden, which had decreased steadily since 2004. Unemployment is forecast at 5.9% in 2008 year from 6.1% in 2007, before rising to 6.5% in 2009 and 2010.
 Statistics from the state collections agent (Kronofigden) reveal that 2007 set a new record in reports of unpaid debts. It received 912,000 requests, or one in every ten people in Sweden, for help in collecting overdue payments.
 Bankruptcies in Sweden through the first three quarters of 2008 were up 5 percent compared to the same period in 2007. September 2008 was a tough month for businesses in Sweden with bankruptcies up 20% from the same month a year earlier. While cause for concern, the large increase is also a reflection of the current prevailing economic conditions. The largest increases occurred in the construction, transportation, restaurant and service industries. As at the beginning of October, 38% of transportation companies had seen their demise compared to the previous year (2007). The corresponding figure for the restaurant industry was 17%, while 8% more construction firms filed for bankruptcy.

Summary
In our opinion, while the political climate is expected to remain stable, the short-term business condition is expected to decline.

Researched and Compiled by Sindiso Valerie Mpofu- Economic Researcher, Credit Guarantee Insurance