SWEDEN'S SOLID CONSUMER BASE.

(From Market - Europe)

Sweden has a solid consumer base in every sense of the word. That stability was underscored during 2002, when Swedish consumption growth easily outpaced that in the European Union as a whole

One of the most important stabilizing factors for household consumption has been steady consumer confidence. With unemployment under control and the macroeconomic panorama looking good, there is little for Swedish consumers to worry about

Unemployment will hold at approximately 4 percent throughout 2003 in a climate of slow job creation and even slower growth of the work force. Inflation should be less than 3 percent and attractive finance costs will bolster high-end demand. Overall household expenditure on goods and services should rise from 2 to 4 percent over the next year

Sales of durable goods will benefit as confidence levels hold firm in 2003. Look for sales of high-end durables to rise in the range of 2 to 3 percent (year-on-year) during the first half of 2003 and approach the 4 percent mark late in the year.

Over the past year, the national currency (the krona) appreciated more than 10 percent against the US dollar. That bodes well for sales of imported high-end goods including autos and household appliances. The krona is likely to remain strong relative to both the dollar and euro through 2003

Real disposable income should increase in the range of 1.8 to 2.2 percent during 2003, and that will boost sales of non-durable and semi-durable goods, as well as household services. Expenditure on such goods should increase by just under 2 percent during the first half of 2003 and slightly higher than 2 percent after that