STOCKHOLM, May 31 (Reuters) - The Swedish economy is thriving, but risks associated with high house prices and large household debt remain elevated, the country’s financial watchdog said on Wednesday.
“A future downturn in the economy could be accentuated by a sharp fall in house prices and large reductions in consumption,” the Swedish Financial Supervisory Authority said in its bi-annual stability report.
It said it plans to introduce a stricter amortisation requirement for households to further strengthen their resilience.
Sweden has one of Europe’s biggest financial sectors relative to the size of its economy. Rapidly rising house prices and household debt in the past 20 years have prompted warnings from the country’s central bank as well as from the European Commission and the International Monetary Fund.
Reporting by Stockholm Newsroom