Sweden faces inflation, poverty and social inequality – 03/24/2023 – Market

The thin ice of modern life is starting to crack under Swedes’ feet. Always remembered as an example of social equality and the well-being of its citizens, Sweden is now facing the harsh reality of inflation and, even worse, an expansion of a poor class that already reaches 15% of the population.

February closed with a monthly inflation of 1.1%, the same as in the United Kingdom, a surprise for the nation that has always prided itself on economic stability. It is an index that has been stable, since, in relation to the previous 12 months, inflation is at 12%.

“Inflation hasn’t been this high here since the end of the 1980s,” Annika Alexius, a specialist in macroeconomics, monetary policy and international finance, tells Folha.

But, according to the economist, these 12% in the year do not reflect the truth of the streets of the Swedish capital. “Given that food prices and housing costs have risen more than overall inflation, families that were already poor are really struggling,” she says.

“We see that children eat much more free school meals than before. It is a sign that a considerable part of families have problems providing good food for their children.”

In fact, the increase detected by the website Trading Economics regarding food in Sweden was 20.95% in the last 12 months, an unprecedented mark since the 1950s.

Last week, the Swedish government announced that it would hold a meeting with the country’s three big supermarket chains to say that any unwarranted price increases would be considered “unacceptable”.

This increase came after an increase in the price of electricity, one of the disastrous consequences of the War in Ukraine that could be felt throughout Europe. Another factor contributing to this inflation is the increase in interest rates in recent months.

“The exchange rate is weak and interest rates have risen, so that imported goods —Sweden imports most of its food—, housing costs and transport have increased more than inflation”, explains Alexius.

In a report made in Stockholm, the news agency France Presse was in some places of delivery of free food of charitable organizations. In one of them, Kawian Ferdowsi said that “in the 13 years that I’ve been at the head of this association for homeless people, I’ve never seen so many people, I see more and more people looking for a little help”.

At the Red Cross, officials reported a change in the profile of those attending the site. “Before we saw essentially marginalized people. Now that has changed. They are also families with children, the elderly or people on sick leave, everyone has problems paying the bills”, said the secretary general of the organization in Sweden, Martin Ärnlöv, to the agency.

A survey commissioned by the entity concluded the unthinkable for the Nordic country: one in eight low-income families with only the father or mother present says that they have been going hungry.

According to Annika Alexius, the official definition of poverty in Sweden is someone who earns “less than 60% of the median disposable income”. And today nearly 15% of Swedes are gravitating close to that line.

If the average income in the country is €2,900 (although the country has not adopted the euro and continues to use the Swedish krona), which is R$16,400, being a poor Swede is earning less than €1,740 (R$9,800 ).

Finally, Alexius does not believe that Sweden can be labeled an “unequal country”. “Not compared to most other countries,” she says. “But inequality has increased significantly.”