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TOURISM

Why Sweden wants to drastically slash visitor numbers to popular mountains

Sweden’s tourist association STF has launched a bid to cut the number of hikers on certain popular trails.

Why Sweden wants to drastically slash visitor numbers to popular mountains
Sweden's tourism association wants to cut visitor numbers to some of the popular mountain trails in the Jämtland region. Photo: Niclas Vestefjell/imagebank.sweden.se

Tourists spend around 50,000 nights at the Swedish tourism association’s mountain lodges in the Jämtland region every year.

But their presence is taking its toll on the country’s spectacular mountain range, including on Sami reindeer herding.

Sweden’s laws on reindeer herding – a right granted only to the indigenous Sami communities – gives the state the right to give STF permission to use the land only if it is not of “significant inconvenience” to the animals.

But tourism in the area has grown in recent years, with reindeer struggling to graze and calve in peace.

Jämtland is described by STF as a “unique situation”, because its spider’s web of trails criss-crosses the mountains, and large parts of the area are not protected by a national park or nature reserve, making it hard to control visitor movements.

“We built the first mountain cabin in the Jämtland mountains over 130 years ago. Now we’re taking responsibility by stepping back from the trend over the past few years to enable sustainable outdoor life for at least another 130 years,” said STF secretary-general Maria Ros Hjelm in a statement.

“STF will continue to offer overnight accommodation for hikers and skiers, but we will change the food on offer, reduce the number of beds, change the opening hours and dismantle one cabin.”

Right, Maria Ros Hjelm, secretary-general of the Swedish tourism association STF. Photo: Linnea Vesterlund/TT

STF’s current lease runs out at the end of the year, and after that it proposes the following changes:

Reduced opening hours at STF’s mountain lodges in Jämtland and Härjedalen during for example calving season. Lodges in areas not accessible by road will completely close in winter.

At the Blåhammaren mountain station, the restaurant will close for good and the number of beds will be halved to 30. Visitors will still be able to buy basic food from the shop and prepare it in the kitchen.

The situation is similar at the Sylarna mountain station, where the number of beds will be cut by 25 percent. Its restaurant, as well as the restaurant at the Helags mountain station, will close by 2028.

STF believes that closing the restaurants will lead to fewer people visiting the area.

The Gåsen mountain hut will close completely, to create space for reindeer and their calves.

Reindeer in Jämtland. Photo: Pontus Lundahl/TT

Ros Hjelm said the discussion with the Sami communities had been “very educational, sometimes difficult, but above all important. Without a good and constructive dialogue, we would never have reached what we are now presenting. If STF is serious about sustainable development, we have to take these steps sooner or later. It turns out to be sooner, which makes me both happy and proud.”

She added: “We are a major player in the hospitality industry, but we are above all a non-profit association which wants to show in no uncertain terms what we represent, and we have therefore let our values guide us. Our national assembly has decided that STF should be a driving force in the sustainable transformation of tourism and outdoor life, and these changes are in line with that decision.”

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MONEY

Why the Swedish krona is expected to strengthen in the year ahead

In the last decade, the Swedish krona has generally been weak against major currencies like the US dollar and the euro. However, some analysts believe it may strengthen in the coming year.

Why the Swedish krona is expected to strengthen in the year ahead

In recent months, the Swedish krona has faced significant fluctuations against major currencies.

On June 28th, the krona lost ground following a softer-than-expected interest rate policy statement from Sweden’s central bank, Sveriges Riksbank.

After a rate cut in May (the first one since 2016), the Riksbank recently also indicated that interest rates could be reduced three more times by the end of 2024.

This announcement led to immediate reactions in the currency market.

The euro-krona exchange rate increased to 11.33 from 11.29 (meaning that you now need 11.33 kronor to buy one euro), while the pound-to-krona exchange rate rose to 13.40 from 13.34.

Despite this, some analysts believe the Swedish krona is poised for a rebound in the year ahead.

The krona’s long downward trend

In a recent report, Rory Fennessy, a senior economist at the advisory firm Oxford Economics, pointed out that the Swedish krona appeared undervalued.

Despite its underlying strengths, such as consistent trade surpluses (where Sweden’s exports exceed its imports), high productivity, solid public finances, and a credible central bank, the krona has been on a long downward trend.

Identifying a single reason for this persistent weakness over the past decade is a challenging affair.

Negative interest rates, which the Riksbank implemented in the late 2010s to achieve its inflation target, are often mentioned as an important factor.

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However, this explanation mainly accounts for the weakness against the US dollar. Around the same time, the European Central Bank (ECB) also had negative rates, yet, as Fennessy pointed out, the krona still weakened against the euro.

More recently, the Riksbank’s response to the inflation surge since 2021 has further weakened the krona.

“We think the Riksbank was slow to respond to the recent inflation shock. As late as February 2022, the Riksbank signaled in its official forecast that the policy rate would stay at zero until 2025. But by this point, broad price pressures were gaining momentum in the economy,” Fennessy said.

“At the next policy meeting in April 2022, the Riksbank started the hiking cycle, contrary to its earlier guidance, and has been playing catch up since.”

The currency roller coaster and interest rate cuts

This year, the Swedish krona has experienced significant ups and downs against major currencies.

According to Oxford Economics, this volatility has been caused by a mix of global factors and domestic events in Sweden.

Without these factors, the krona would likely have been more stable. 

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While inflation in Sweden is near the Riksbank’s target, the high real interest rates are hurting economic activity.

Therefore, experts expect the Riksbank to continue cautiously lowering interest rates, using this as the main tool to manage the exchange rate.

A year of gains for the Swedish krona?

After a period of significant volatility, the Swedish krona is expected to gain support from decreasing domestic risks and positive external developments, according to Oxford Economics.

“The Nordic currencies have been highly volatile this year. The Swedish krona and Norwegian krone both depreciated sharply until May but have since regained much of their losses,” said Fennessy.

“We believe both the Swedish krona and Norwegian krone will appreciate gradually this year and over the medium term, but there may be bumps along the way due to external factors and unexpected data.”

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Earlier this year, the Swedish krona weakened due to stronger-than-expected US economic activity and inflation. This led to changes in interest rate expectations and negatively affected Nordic currencies.

However, recent US economic data has been weaker, and Nordic central banks have adopted stricter policies to protect their exchange rates.

According to Oxford Economics, coordinated interest rate easing across these regions should help reduce external pressures.

The road ahead

Since early May, the Swedish krona has strengthened by 4.5 percent against the euro, even though the Riksbank cut interest rates before the European Central Bank did.

At the same time, lower-than-expected US inflation and weaker economic activity have reduced expectations for interest rate hikes in the US.

These changes in global economic data and risk sentiment have been among the main drivers of the krona’s recent ups and downs.

According to the Oxford Economics report, the Riksbank has regained its credibility now that inflation is near its target, and the next challenge is for the bank to ease its monetary policy at a pace that supports the economy without causing too much volatility in the currency.

This balance is crucial for maintaining economic stability, Fennessy noted.

Looking ahead, the economic advisory firm expects that the krona will hold onto its recent gains and could appreciate by another 2 percent against the euro in 2025 – as long as there are no unexpected economic shocks.

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