The centre-right government had previously expected growth of 3.2 percent this year but Anders Borg said it now expected it to come in around 2.2 or 2.3 percent.

For 2009, it lowered its forecast from 2.5 percent to 2.2 percent.

The Finance Minister said there was an internal economic downturn with exports adversely affected.

Sweden he said, would still have higher growth than most other countries in Europe but growth would not be as high as his government had thought back in the autumn.

Source: By Sveriges Radio 2008