"Sweden is a strong knowledge-based economy, well integrated in global value chains, which ensures high standards of living, well-being, income and gender equality, as well as a high environmental quality to its inhabitants. Growth has been broad-based over the past five years, with consumption, investment and exports all contributing significantly. Meanwhile, strong domestic demand has pushed up imports (Figure 1)."Measures of the output gap and indicators of capacity utilisation suggest the economy is operating close to full capacity (Figure 2). Even so, monetary policy remains expansionary, while fiscal policy is slightly expansionary."Sweden’s employment rate is the highest in the European…