STOCKHOLM /Reuters – The government forecasted that headline inflation would be at its highest since 1990.

This year’s growth projections were revised to 3.1% by the government, down from 3.4% in December. Inflation was averaging 4.6% in comparison to 2.1% as expected in December.

Mikael Damberg from Finance Ministry said to reporters that Russia’s invasion into Ukraine will bring rising prices, uncertainty, lower trade and higher volatility. The war in Ukraine will have a negative impact on Sweden, with lower growth and greater price increases.

NIER, a think tank that forecasts growth at 3.3% in 2022 and an inflation rate of 5.2% per year for next year, released its predictions earlier this week.

The headline inflation in February was 4.5%, as compared with the same month of 2021.

Sweden’s economy recovered quickly from the pandemic. Despite Russia’s invasion, it is likely to continue its relatively robust performance.

Inflation has pushed the government to take measures to reduce the negative impact on consumers from higher fuel and energy prices and increase defence spending.

Russia describes the conflict as a “special military operations” that has forced many to flee Ukraine. Nearly 10 billion crowns (1.07 billion dollars) have been set aside by the government to pay housing costs for the refugees arriving in Sweden.

On April 19, 2019, the government will issue its spring mini-budget.