Sweden's population is about to cross 10 million.
While that's an arbitrary threshold, the record population growth that made it happen goes a long way to explaining the nation's booming economy. It will also -- if handled the right way -- help Sweden tackle the challenges posed by an increasingly aging society better than other advanced economies such as Germany or Japan, where the population is projected to drop.
The Nordic nation could reach the landmark of 10 million inhabitants as early as next month, according to a countdown by Statistics Sweden. Eleven million will be crossed in 2024, the fastest 1 million gain in its history, the statistics agency says. The main reason is record immigration. But an increase in the number of babies is also helping Sweden buck the trend.
The development could be a blessing for a country that already spends a sizable proportion of its money on pensions and senior care. The number of Swedes aged 65 and above will account for a quarter of the total population by 2060, up from a fifth in 2016, according to Statistics Sweden. At the same time, net migration and a rising number of births will feed into the workforce.
“An increase in the number of people of working age can help counter the increased dependency burden that we’ll see as the number of elderly people grows,” Anna Breman, chief economist at Swedbank AB, said by phone.
That’s because a rapidly expanding population tends to boost economic growth and tax revenue. Breman argues that a rising population may also help lift investments in infrastructure and the public sector.
But the sparsely populated Nordic country would still need to address a number of challenges.
“While we have the space for another one million people, we have a housing shortage in the big cities,” Breman said. “The Swedish labor market is also very divided," she said, and matching people to jobs won’t be easy.
According to the statistics agency, the main driver of the population growth until 2040 will be net migration. The country had a relative open doors policy until the refugee crisis of 2015, when it welcomed an unprecedented 163,000 asylum seekers. Beyond that, it will mostly stem from the number of births exceeding the number of deaths - the so-called "natural increase."
Thanks to gender-equality measures and generous parental leave conditions, Sweden already has one of the highest birthrates in Europe. And today's immigration is expected to boost the fertility rate even further going forward.
Still, many of the country's newly arrived don’t have the appropriate qualifications, which will put pressure on the system in terms of providing jobs and education.
The population increase “is very good in the long term, but we need to address the housing shortage, the divided labor market and the problems with matching,” Breman said.