Sweden's economic fundamentals are strong. The economy has started to recover after two years of economic stagnation, but Sweden now faces growing risks from an insecure and swiftly changing international environment. The costs of a changing climate are increasing, while Sweden's adaptation framework remains somewhat fragmented and stronger price signals could spur private sector action. Slow zoning and permitting for new construction and tax support for home ownership inflate property prices, while rent controls reduce the availability and quality of housing, especially for low-income households. Adult skills are high and improving and few people have very weak skills. Important school reforms are in the pipeline, but more could be done to raise equity and improve the attractiveness of upper secondary vocational education and the quality of tertiary degrees. People with weak skills struggle to get jobs and feel socially and politically disaffected. Proven and effective interventions to address skill deficiencies are used too little and too late and value for money in adult education can improve.