Sweden, also known as the Kingdom of Sweden, is a Scandinavian country in Northern Europe. It is the third largest country in Europe by area, with a population of 10 million people. It has the lowest population density in the European Union, with only about 22 inhabitants per square kilometer. About 85% of the Swedish population resides in urban areas, mostly in the southern parts of the country. The most populous city of Sweden is Stockholm, which is also the country’s capital city.
The Swedish Krona
The Swedish krona has been used as the country’s official currency since 1873. The ISO code of the Swedish krona is ‘SEK’ while the currency sign ‘kr’ is used to represent the same. The krona is subdivided into 100 öre. The term ‘krona’ means crown in English. The Scandinavian Monetary Union, which is comprised of Sweden, Denmark, and Norway, had used the gold standard to value the respective currencies of the countries, such that the Swedish krona was set at 1/2,480 of a kilogram of gold. After the breakup of the union after World War I, the currencies of the different countries were kept. Sweden kept its own krona. The central bank of Sweden allowed for the trading of the krona against other world currencies in 1992 and continues to intervene to maintain the value of the krona.
In April 2013, the Swedish krona was the 11th most traded currency by value and continues to be one the most traded even today. However, from October 2016 until May 2017, the Swedish krona suffered the worst decline in its history, with many financial analysts blaming the algorithmic traders and bots for the rapid decline. The Swedish krona, commonly referred to as stokkie, had slid 1.4% against the euro in May 2017, which was by then a 5-month low, and stood at 9.79 per euro.
Importance of the Krona to the Economy of Sweden
Sweden is one of the richest countries in the world. It is ranked as the seventh richest country in terms of GDP (gross domestic product) and per capita income. The citizens of Sweden experience high standards of living because of the developed economy. As a mixed economy country, Sweden exports a wide variety of goods and commodities such as timber, hydropower, and iron resources. The engineering sector accounts for about 50% of the economic output and exports. Sweden is recognized as the ninth-largest arms exporter in the world, with a huge presence in telecommunication, automotive, and pharmaceutical industries. Agriculture contributes to 2% of the country’s GDP and employment. Telephone and internet access penetration of Sweden is one of the best in the world.
The Swedish economy is found and based on knowledge-intensive paradigms, with a vital focus on export-oriented manufacturing. The business service sector is comparatively small but still increasing and becoming very significant to the overall economic outlook. In Sweden, technology plays a vital role in the GDP with various manufacturing for high and medium technology contributing 9.9% to the country’s GDP.
Sweden has kept its own currency, the Swedish krona, after the Swedish residents rejected the adoption of the euro in a referendum. The central bank of Sweden is the Sveriges Riksbank, and is the oldest central bank in the world, having been founded in 1668. It focuses on price stability by monitoring inflation. Average inflation rates in Sweden have been the lowest in Europe since the mid-1990s.