Unemployment is predicted to fall from 8.8 percent last year to 8.5 percent this year, which also matches previous forecasts.
According to Finance Minister Elisabeth Svantesson, of the conservative Moderates, the outlook appears brighter than it did just a few months ago, and inflation shouldn't pose a problem.
"Right now, we don't see this being an issue for the Swedish economy," she told a press conference. "Unemployment is, yes, too high, but it is now starting to move in the right direction."
On the same day, the Riksbank signalled that the probability of an interest rate hike this year has increased.
"That is a reasonable assessment because a high level of uncertainty persists. But even if everything were sorted out tomorrow [with the Iran conflict], it would still be weeks or months before things stabilise, and I have said all along that what is happening now will impact the Swedish economy for the rest of this year," Svantesson said.
According to the finance ministry's forecast, the public finances deficit will land at 2.5 percent of GPD this year. After that, the deficit will shrink, almost reaching a balanced budget within a few years.
"This forecast, and the development of the public finances, continues to give us very good buffers. We can handle tough, tough situations," said Svantesson.
But the Social Democrats' economic policy spokesperson, Mikael Damberg, pointed out that the government lowered its GDP forecast for 2027 from 2.7 to 2.5 percent.
"The Tidö government has failed on the economy, and Svantesson has presented wishful thinking throughout the entire parliamentary term. It is going to be expensive for Swedish families," he said.
The Centre Party's Martin Ådahl said Sweden "needs a finance minister who recognises the crisis", branding the forecast over-optimistic.
"In one breath they talk about a high unemployment rate of 8.5 percent, and in the next, about a strong forecast. It doesn't add up," he said.