Growth for this year is now projected at 3.0 percent, up from the 2.5 percent predicted in August's forecast.
The incoming government – whoever it is – is inheriting a "beautifully set table", Finance Minister Elisabeth Svantesson said.
"It is clear that the Swedish economy is booming," she told a press conference.
Households are feeling confident enough to spend and Swedish companies across many sectors are performing extremely well, she added, noting that Sweden stands out compared to other EU countries.
However, the growth forecast for next year has been trimmed slightly to 2.3 percent, down from the previous estimate of 2.5 percent.
"We are leaving the recession behind now, and next year the economy will be back in balance," Svantesson said.
The government expects a gentle recovery in the labour market. Unemployment is projected to continue falling this year, reaching 7.7 percent next year, according to the forecast. For this year, unemployment is estimated at 8.5 percent.
Svantesson emphasised that the forecast is nevertheless surrounded by uncertainty. The conflict in the Middle East continues and is escalating in part.
"We see no resolution, and the longer it goes on, the greater the risk that energy prices will not return to more normal levels, but rather stay high," she said.
Other major uncertainties include the ongoing war in Ukraine and the economic impact of AI.
Domestic demand could also be hit by rising interest rates.
For the upcoming parliamentary term, the fiscal manoeuvring room is still estimated at 50 billion kronor.