Where are the best incomes and demographic trends in Europe?
In two words: Scandinavian countries.
We constantly hear that the Scandinavian countries are the most socialistic in the traditional part of Europe.
Their government spending as a percent of GDP is high. So are their benefits, from health care to welfare.
But the overlooked reason they’re so wealthy and socialistic is simply that they can afford to be.
For example, Sweden, the largest of the Scandinavian country with a mere 9.5 million people, has only 14.4% of its working-age citizens on social services like welfare. In the U.S., 24% of our working-age population requires and accepts government assistance!
So today, let’s take a closer look at all the things Scandinavian countries have going for them…
For starters, all the more northern European countries tend to have higher incomes. That’s not surprising because they’ve had to survive harsher climates and overcome more complex challenges and that’s made them stronger and more competitive over thousands of years. It also means lower unemployment and fewer disadvantaged citizens.
They have the highest GDPs per capita in Europe outside of Luxembourg. Norway is at a whopping $100,819 per head right now. Denmark is at $58,930. Sweden is $58,164. And Finland is $47,219.
For comparison, the U.S.’s GDP per capita is at $53,143.
And the Scandinavian countries have roughly doubled their GDP per capita since 2000, despite demographic trends that have only moved sideways.
One reason for this is Norway’s large oil reserves. Another reason is their laser-like focus and determination to achieve high productivity… a factor resulting from harsh climates and environments.
As you know, challenge breeds innovation.
This is something you see around the world. The richest countries in South America are the closest to the South Pole, like Chile and Argentina. Uruguay is up-and-coming. South Africa (outside of Egypt due to its strategic location) is the richest in Africa and it is in the coolest region.
Almost all of the developed countries in Europe, North America, East Asia, Australia and New Zealand are in the cool-to-cold climate zones. The only exceptions are places like the Gulf States, which has its oil, and Singapore, which is a 100% urban city-state that focuses on financial services and an airline hub much like Dubai.
But back to Scandinavia…
Look at this spending wave chart.
It shows the Spending Wave for all four countries in the region: Sweden, Norway, Finland and Denmark.
And as you can see, it’s the most bullish trend in all of Europe. It first peaked around 1995, then declined a little into 2005.
But look at that! It rises again – back to those peak levels – over the next two years.
Then, after a minor fall into 2025, these countries have one of the few mildly rising Spending Waves in the developed world, along with Australia.
There is one slight hiccup. Just like in the U.S., births and immigration in these countries won’t be as high as before because of the global downturn we’ll endure ahead.
That said, this region has a bright future. It might not be an explosive future, because its demographic trends are relatively flat after 2023, but it’s not a volatile future with a graying, shrinking population and declining economic fortunes.
My view is that Sweden looks the best over the coming decade while Norway will paradoxically likely get hit the hardest due to falling oil prices.
So look to selectively invest in Sweden over the next decade. And spend some time there. Just be prepared to brave the weather!
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