For much of the past two years, Sweden’s economy struggled with weak domestic demand and shrinking household purchasing power. High inflation reduced real incomes, while rising interest rates discouraged both spending and investment. According to economists from LO and HUI, this negative cycle has now begun to reverse. Their latest assessments indicate that economic activity is slowly stabilising and that several key indicators have moved out of contraction territory. Although growth remains moderate, the direction has changed, suggesting that the economy has entered an early phase of recovery rather than continuing to decline. This shift is particularly important because it signals renewed momentum across multiple sectors. Retail activity, services and parts of manufacturing have all started to show modest improvement, supported by easing financial pressure on consumers. While the pace is cautious, the broader trend points toward gradual normalisation after a prolonged period of economic stress.