Sweden GDP Components

Sweden GDP Components





CHART1

CHART2

This chart is from World Bank.According to our textbook, Y=C+I+G+NX. However the formulas and terms used in the real economic world are slightly different.

Formulas (Chart1)GDP = Gross national expenditure + External balance on goods and services

Gross national expenditure = Final consumption expenditure, etc. + Gross capital formation





Final consumption expenditure, etc. = Household final consumption expenditure + General government final consumption expenditure.



When we apply the definition to each sector and make some adjustment. Here comes a chart applying our textbook formula to show the composition of Sweden GDP.  (Chart2)
Among the fours GDP components- C, I, G, NX, there are two of we should pay special attention. 

 

Government purchases

Comparing with the 21% of U.S government purchases in GDP and 8% of HK. Swedish government purchases takes up 27% of the GDP is quite a high value. The government tax a lot from the citizens and using the money to building infrastructure like railways, hospitals and to support its huge welfare system. And we will discuss it in The welfare system in Sweden page.

We can say that Sweden has a ‘big’ government due to the great government spending. But here is a video telling us that the Swedish government is getting ‘smaller’. As of 2012, total tax revenue was 44.2% of GDP, down from 48.3% in 2006.

Net export

Net export contributes 6% to the whole Sweden GDP. Sweden relies a lot on world trade and it is a developed export-oriented diverse economy whose main export partners are Germany, United States and Norway, while the agriculture heavily relies on import.

Pillar industry  

From chart1 we can see that services contributes 74.3% to the GDP, following by industry 24.2%, agriculture 1.5%.

The service sector is definetely the Pillar industry by far the largest in the Swedish economy in terms of employment. It consists not only of traditional services like financial, educational and medical but also of an increasing service part in production industries. Large parts of the Swedish service industry belong to the public sector (especially the welfare system), for instance are almost all hospitals, schools and child care centers owned by the State.

The engineering industry is the largest manufacturing industry in Sweden. The industry has a very high technological level. There are brands that famous all over the world like Volvo, Ericsson, etc.