1920 - Strong deflation after the war

The end of the war meant that the strong demand for Swedish products abroad collapsed with devastating deflation and an economic crisis as consequence.

At the end of the war, demand for Swedish products from abroad decreased. At the same time, the government endeavoured to return to the gold standard with the same exchange rate against the krona as had applied prior to the war. The consequences were strong deflation, which is to say that the value of money increased. This meant that many companies were unable to service their loans, which caused a banking crisis and led to a heavy increase in unemployment.The gold standard was reintroduced in 1924 and the Swedish economy gradually recovered.