Sweden rediscovering poverty amid soaring inflation

It’s not yet 6 a.m., and dozens of homeless people are already queuing for breakfast outside Stockholm Central Station, more than ever, charities say.

Hit by the highest inflation in more than 30 years and on the brink of recession, the visible signs of poverty in Sweden are intensifying amid growing inequality.

“So many people come here for breakfast,” said Kavian Ferdowsi, who runs a charity that helps the homeless.

“In the 13 years that I’ve been in charge, we’ve never had so many people,” he told AFP as his colleagues served cinnamon rolls and coffee.

Sweden has suffered greatly from the consequences of the war in Ukraine. Its currency, the krona, is weaker than ever against the euro, and aggressive interest rate hikes have forced many households to pay huge amounts on mortgages.

Sweden’s economy, long stable and prosperous, is now one of the worst in Europe.

After a spike in electricity prices at the start of winter, food prices have become a major concern for Swedes, up 20% from last year.

Inflation has stuck stubbornly at 12 percent since November, according to official statistics released Wednesday.

“The first wave of inflation is just energy prices and some import prices. But now it has spread to the entire economy,” said Annika Alexius, an economist at Stockholm University.

– To make ends meet –

Low-income households, already struggling to make ends meet, have been hardest hit, but even the country’s middle class, now one of Europe’s most indebted due to years of low interest rates, is struggling to keep up with skyrocketing mortgage payments. . .

The Red Cross shop in the capital sells leftover goods from the supermarket at discounted prices.

Marianne Orberg, a 73-year-old ex-lawyer, bought a few radishes and buns there from her shop twice a week.

Although the pensioner insists that she is not among the poorest, she tries not to spend her savings.

“People have changed their eating habits. You currently eat a variety of foods to make ends meet,” Orberg said.

Red Cross officials say new groups of people now need help.

“Before, we mostly saw people living on the margins of society,” Martin Arnlov, general secretary of the Swedish Red Cross, told AFP.

“Now that has changed. It’s families with children, and the elderly, and sick people – it’s hard for everyone.”

– Seeking recession –

According to the organization, nearly one in eight low-income single-parent households say they find it difficult to feed their children and go hungry.

Sweden has long been one of the world’s most egalitarian countries, known for its generous welfare state from cradle to grave.

But its wealth gap has widened significantly in the 30 years following decades of reforms to tighten public finances that have made it one of the strongest economies in Europe but hurt many Swedes.

Data from Statistics Sweden shows that almost 15 percent of Swedes are at risk of poverty, meaning they have less than 60 percent of the average income of 33,200 crowns ($3,140) a month.

Humanitarian organizations this week urged the government to increase social benefits to help those most in need and urged schools to offer breakfast to prevent children from starting the day hungry.

Finance Minister Elisabeth Svantesson said she would convene the three largest grocery chains to emphasize that the government would not tolerate any “unnecessary” price hikes.

Sweden is expected to be the only EU country to enter recession in 2023, according to the latest forecast from the European Commission.

But economist Annika Alexius predicts that the Scandinavian country may be just the tip of the iceberg.

“Let’s say we’re a bit ahead of other European countries in this recession,” she said.

“We are a bit like the United States in that inflation came early… Other European countries will also face a worsening situation.”