The Organisation for Economic Cooperation and Development has said the Scandinavian economy is operating at close to full capacity yet weaknesses persist.

While projected growth this year of 1.6% is set to rise to 1.7% in 2020 and employment is strong, policymakers should act now to prolong Sweden’s success – and ensure everyone benefits, the OECD recommends.

“The Swedish economy is thriving, but nevertheless dependent on the global economy’s continued expansion and openness,” said OECD secretary general Angel Gurría. 

“Today’s prosperity is testimony to the benefits of the unique Swedish combination of openness and inclusiveness. 

“Every effort must be made to ensure that the policy framework is maintained, and translates into decent work, better quality jobs, and high levels of well-being for all.”

Gurría was presenting the latest OECD Economic Survey of Sweden in Stockholm with the country’s finance minister Magdalena Andersson. 

The OECD believes that monetary and fiscal policies supportive of growth are key factors behind Sweden’s economic success. 

It says government budget surpluses should be maintained, providing fiscal space to stimulate the economy in the event of a downturn.

However, structural weaknesses could put at risk Sweden’s financial and economic stability and harm social mobility and well-being, it warned. 

Declining school results and trends in society such as immigration and rising income inequality have strained social integration.

OECD economists recommend reforms to property taxes, land-use planning, rent regulations, business rules and administrative procedures to raise productivity and improve services.

The survey said a coherent package of reforms to raise quality and equity in Sweden’s schools is needed alongside efforts to tackle segregation.