Nordic Outlook: Stabilisation within sight but ...

The world economy has moved from last winter's free fall to a state
of cautious stabilisation, but it has not yet bottomed out. Output
will stop falling late in 2009, but at very low levels. GDP in the
30-country OECD will shrink by 5 per cent this year, and 2010 will be
another recession year. "Zero interest rate" policies in many
countries and large fiscal crisis packages will help the world
economy. Unemployment will nevertheless climb to 12 per cent in many
OECD countries, and output gaps will be record-sized.


In Sweden, the economy will shrink by 5 per cent this year and be
unchanged in 2010. Unemployment will rise to 12 per cent, and the
government budget deficit will reach 6 per cent of GDP. We expect the
autumn budget to take a further step in an expansive direction. And
the Riksbank may keep its key interest rate close to zero both this
year and next, SEB's economists write in their latest analysis of the
economic situation in the world and in Sweden.

"The situation looks a little brighter than three months ago, but the
way forward will be difficult and challenging for businesses and
households. Recent hopes of a quick turnaround - visible in share
prices, for example - thus feel exaggerated. It is too early to
breathe easy," says SEB's Chief Economist, Robert Bergqvist.

"The credit crisis has eased its grip on the world, but the situation
is far from satisfactory," Bergqvist continues. "These problems will
hamper growth for another couple of years. The credit market will
continue its adjustment to an equilibrium consistent with the size of
the underlying economy as well as new risk environments and
regulations," Bergqvist says.

Public debt in the OECD countries can be expected to rise by about 25
percentage points to 100 per cent of GDP during the years 2008-2010
as an effect of active policy decisions and the weaker economy. More
and more central banks are implementing quantitative easing by
purchasing government securities and credit instruments. In a rather
short time, economic policy has changed dramatically.

"We view the risk of deflation as greater than the risk of inflation,
despite enormous supportive interventions by public authorities in
the economy and the banking system," says Håkan Frisén, head of SEB
Economic Research. "The downward pressure on prices due to an
increasing quantity of idle production capacity and global
competition should not be underestimated. Only once credit flows have
normalised and resource utilisation has reached more normal levels
will it be time to shift economic policies," Frisén believes.

The global crisis is hitting export-dependent countries like Germany
and Japan extra hard. Europe is being squeezed by the German
downturn, imbalances in housing markets and large financial exposure
to Central and Eastern Europe. Euro zone budget deficits will move
from 2 per cent of overall GDP in 2008 to 7 per cent in 2010, among
other things in response to rapidly rising unemployment.

"The euro zone, too, is grappling with a rapidly rising quantity of
idle resources, which is pushing down core inflation," says SEB
economist Tomas Lindström, who specialises in Europe. "In purely
theoretical terms, the European Central Bank could have a key
interest rate of -1 per cent. This actually only confirms the need
for unconventional monetary policy," Lindström says.

The downturn in the American economy looks set to be somewhat milder;
economic policy countermeasures were implemented relatively early.
The United States is also a more closed economy that is somewhat less
severely affected by the global export collapse. Yet it will take
some time before the US takes off in earnest:

"American households can hardly propel the US economy forward in the
same way as before," says SEB economist Mattias Bruér, who
specialises in the US. "Most household debt adjustment still lies
ahead of us. We expect households to boost their savings, especially
as unemployment climbs to a new record level of more than 11 per
cent. The stress tests on American banks had a positive outcome, but
the US economy and financial system are not out of the woods yet,"
Bruér says.

To date, Sweden has been hard hit by the global downturn. A large,
cyclical export sector has proved more important than strong
fundamentals. The downturn is now spreading from industry to domestic
portions of the economy. In particular, there is increasing pressure
for cost savings in the local government sector if it is to meet its
balanced budget requirement. Because of high unemployment, wage and
salary increases will be at record lows and CPI inflation will end up
close to zero, thus validating the reasoning behind the Riksbank's
zero interest rate policy.

"The situation in the Swedish economy looks difficult for the next
couple of years, but eventually exports may benefit from the weak
krona, at the same time as there is more room for fiscal stimulus. We
are sticking to our earlier assessment that the government's fiscal
stimulus in 2010 will be SEK 45 billion, which means that the autumn
budget may include new measures totalling about SEK 20-25 billion,"
Håkan Frisén believes.

Key figures: International and Swedish economy

+-------------------------------------------------------------------+
| International economy. Year-on-year       | 2008  | 2009  | 2010  |
| percentage change                         |       |       |       |
|-------------------------------------------+-------+-------+-------|
| GDP, United States                        |  1.1  | -3.3  |  0.5  |
|-------------------------------------------+-------+-------+-------|
| GDP, euro zone                            |  0.7  | -4.6  | -0.8  |
|-------------------------------------------+-------+-------+-------|
| GDP, Japan                                | -0.7  | -7.7  | -2.1  |
|-------------------------------------------+-------+-------+-------|
| GDP, China                                |  9.0  |  5.5  |  6.5  |
|-------------------------------------------+-------+-------+-------|
| GDP, OECD countries                       |  0.9  | -4.7  | -0.5  |
|-------------------------------------------+-------+-------+-------|
| GDP, the world (purchasing power          |  3.2  | -2.2  |  1.1  |
| parities, PPP)                            |       |       |       |
|-------------------------------------------+-------+-------+-------|
| Swedish economy. Year-on-year percentage  | 2008  | 2009  | 2010  |
| change                                    |       |       |       |
|-------------------------------------------+-------+-------+-------|
| GDP, working day adjusted                 | -0.5  | -4.9  | -0.4  |
|-------------------------------------------+-------+-------+-------|
| GDP, actual                               | -0.2  | -5.0  | -0.1  |
|-------------------------------------------+-------+-------+-------|
| Unemployment (%, ILO definition)          |  6.2  |  8.9  | 11.4  |
|-------------------------------------------+-------+-------+-------|
| CPI inflation                             |  3.4  | -0.6  |  0.5  |
|-------------------------------------------+-------+-------+-------|
| Public financial saving (% of GDP)        |  2.5  | -3.2  | -6.0  |
|-------------------------------------------+-------+-------+-------|
| Repo rate (December)                      | 2.00  | 0.25  | 0.25  |
|-------------------------------------------+-------+-------+-------|
| Exchange rate, EUR/SEK (December)         | 10.92 | 10.80 | 10.00 |
+-------------------------------------------------------------------+


SEB is a Northern European financial group serving some 400,000
corporate customers and institutions and five million private
individuals. SEB offers universal banking services in Sweden, Germany
and the Baltic countries - Estonia, Latvia and Lithuania. It also has
a local presence in the other Nordic countries, Poland, Ukraine and
Russia and a global presence through its international network in
leading financial centres. On March 31, 2009, the Group's total
assets amounted to SEK 2,460 billion and its assets under management
totalled SEK 1,187 billion. The SEB Group has about 21,000 employees.
Read more about SEB at www.sebgroup.com.

____________________________________________
For further information, please contact:
Robert Bergqvist, telephone [phone]
Håkan Frisén, [phone]
Mikael Johansson, [phone]
Mattias Bruer, [phone]
Bo Enegren, [phone]
Tomas Lindström, [phone]
Elisabeth Lennhede, Press and PR, [phone],
[e-mail]


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