A report from the Swedish National Institute of Economic Research claims that municipalities across the country may be forced to raise taxes to pay for the recent population growth fueled by mass migration.
Urban Hansson Brusewitz, head of the National Institute of Economic Research (KI), said that due to the population growth of around 100,000 people per year, the quality of social services was at risk, Svenska Dagbladet reports.
“We are facing some years of demographic challenge, which makes me a little worried that the municipalities may be forced to raise taxes,” Brusewitz said.
He noted that the biggest issue for the Swedish government is the disproportional rate of unemployment among migrants which is likely to put a burden on the social system as more migrants enter the country.
While the average unemployment rate for native Swedes is around 3.9 per cent, one of the lowest in Europe, the unemployment rate for individuals from migrant backgrounds is much higher at around 21.8 per cent according to figures from last August.
While Brusewitz praised government attempts at putting money into education for immigrants, he said that education may not be enough to change the situation and added that the government should work to lower the cost for businesses to operate, as well.
The National Economic Institute also estimates that economic growth in Sweden is expected to shrink in the coming years from 1.7 per cent GDP per capita growth in 2018 to a mere 0.3 per cent in the following years.
The warning comes only months after Swedish Socialist Party Finance Minister Magdalena Andersson announced that the government was considering raising the age of retirement in order to pay for the costs of population growth.
Last summer, the EU statistics agency Eurostat published figures showing Sweden to have the second highest population growth in Europe and that mass migration, rather than birth rates, was the cause.