How Sweden is adapting to economic shifts, cultural tensions and a renewed interest in spirituality

Insights|March 13, 2025

Sweden is navigating a period of rapid change, with shifting economic conditions, cultural tensions and evolving attitudes toward faith. As financial pressures mount, debates over media and the arts intensify, and spirituality takes on new forms, the question arises – what does the new normal look like?

This question was at the center of a panel discussion moderated by Assaad Daoudi, where economist Annika Winsth, journalist Parisa Amiri and religious historian Joel Halldorf explored how these transformations are shaping Sweden’s future.

Economic uncertainty

Sweden’s economy is under strain, with some drawing comparisons to the 2008 financial crisis. Rising interest rates have hit mortgage holders hard, especially as around 70% of them have short-term or variable rates. A year ago, mortgage rates were hovering around 4%; today, they have dropped to 2.7%, offering some relief. Meanwhile, many households have built financial buffers, which has softened the blow.

Beyond domestic concerns, global trade tensions loom large. While Donald Trump’s proposed tariffs would have a relatively small direct impact on Sweden’s GDP (about 3%), the bigger issue is the long-term shift away from free trade – one of the cornerstones of Sweden’s economic success. Even so, Sweden remains a global innovation leader, ranking second in the world, ahead of the U.S., which ranks third.

Culture under fire

Sweden’s cultural sector is facing heightened scrutiny, with debates over funding and artistic freedom becoming increasingly tense.

While Sweden continues to invest significantly in the arts, there is a noticeable shift in priorities, with more focus on defense and infrastructure. At the same time, the role of diversity in media and entertainment is evolving. Large corporations, like Disney, are scaling back diversity initiatives, reflecting a broader shift in attitudes. Meanwhile, cases of cultural censorship of unacceptable art – like the removal of a Marilyn Monroe artwork from a dentist’s office in Scania – have fueled debates over what is considered “acceptable” in the public sphere.

Despite these tensions, independent media and alternative platforms are thriving. As trust in traditional outlets declines, smaller, more diverse voices are finding new ways to reach audiences.

A surprising turn toward spirituality

For decades, Sweden has been considered one of the world’s most secular countries, but interest in spirituality is quietly growing, especially among Gen Z. While church attendance remains low, confirmation rates in Stockholm jumped 10% in 2023, and early signs suggest 2024 could see even greater engagement.

This is not necessarily a reaction to crisis; rather, many young people are exploring faith and spirituality as a counterbalance to material saturation. Social media has played a major role in this shift, blending self-help, psychology, and religious themes into a new kind of spirituality. Concepts like manifestation echo older religious traditions that saw faith as a path to success.

At the same time, the rise of online spiritual movements has created opportunities for exploitation. Just as ancient Rome had a marketplace of cults and secret societies, today’s digital world offers an endless mix of belief systems. Many people experiment with different practices –attending church one day, meditating the next – without fully committing to any one path. But this fluidity also makes it easier for fraudsters to take advantage of those searching for meaning.

The road ahead

In many ways, the “new normal” isn’t all that new – history has seen similar patterns before. While today’s economic challenges are real, they may not be as severe as the 2008 crisis. Trade tensions with the U.S. are concerning, but they’re also part of a longer negotiation game rather than an existential threat. Cultural debates over artistic freedom and funding have played out in different forms before, just as shifts in spirituality have emerged in response to societal change.

Societies adapt, recalibrate, and move forward. Sweden is no exception. As the country adjusts to a new reality, looking back at the past may offer valuable clues about what comes next.