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The sluggish global economy will impact Swedish growth more than expected next year, the government said Monday as it revised downwards its 2014 growth forecast from 3.0 percent to just 2.2 percent.
Finance Minister Anders Borg, presenting the supplementary spring budget to parliament, said he expected growth for this year to tick in at 1.2 percent, up a notch from the 1.1 percent forecast last autumn.
"There is a strong headwind from the global economy which is holding back the recovery in Sweden," Borg said in a statement.
Unemployment was meanwhile expected to affect 8.3 percent of the workforce this year and 8.4 percent next year, before falling back to 8.1 percent in 2015.
In February, the jobless rate was 8.2 percent.
Erica Blomgren, analyst at bank SEB, said the government's previous growth forecast from the autumn was "too optimistic", while the current forecast was "more in line" with that of the central bank.
Sweden will hold legislative elections in September 2014, when the left-wing opposition, headed by Social Democrat leader Stefan Loefven, hopes to wrestle power from the centre-right government in power since 2006.
In a speech Friday, Loefven promised that if the Social Democrats were to win the elections, they would bring the unemployment rate down to 4.7 percent by 2020.
"The government has failed on the jobs front, and Sweden today has higher unemployment than comparable countries in the European Union," Loefven lamented, citing eurozone countries such as Austria, Belgium, Finland and the Netherlands.
Meanwhile, the Swedish government also lowered its forecasts for its public finances.
It predicted a budget deficit of 1.6 percent of gross domestic product for 2013 and 1.0 percent for 2014, compared to the 1.3 percent and 0.6 percent forecast respectively in December.
Until September last year, Prime Minister Fredrik Reinfeldt's government had aimed to have a budget surplus in 2013.
According to Monday's forecasts, public debt is expected to climb to 42 percent of gross domestic product this year, compared to 38.2 percent in 2012.