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Investing in Sweden – A Cold Country with a Hot Economy

What comes to mind when you think of Sweden: Blonde hair, pale skin, and a pair of sullen blue eyes piercing through a whiteout - or an economy that grew 5.5% last year? Too often, it's the former when it should be the latter. Indeed, chances are you've never thought about investing in Sweden. But the country that is so often thought of as being cold - if it's thought of at all - is actually overheating. The Swedish economy expanded by 5.5% last year, making it the fastest growing economy in Western Europe. Sweden's central bank, the Riksbank, was the first central bank in the European Union (EU) to raise interest rates. It has lifted its key repurchase rate five times since last July, squelching inflation. The most recent hike came on Feb. 15 - a 0.25% increase that took the rate to 1.5%. And with the prospect of further rate increases in the short-term, the Swedish krona has risen to its highest level against the euro in 10 years. Some manufacturers have warned that the soaring currency could undermine the country's export-led recovery, but the Swedish economy is still on pace to grow 4.4% this year. Additionally, inflation remains low, unemployment is on the decline, and Sweden's national debt is lower now than it was in 2006.
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