Sweden near-term growth prospects "uncertain": IMF

WASHINGTON (Reuters) - The Swedish economy's near-term growth prospects are uncertain, the International Monetary Fund said on Monday, adding concerns about the speed of the recovery and fiscal turmoil in some European countries are an added risk to the outlook.

In its annual review of the Swedish economy, the IMF forecast that growth should hit 3 percent this year before slowing to 1.9 percent in 2011.

"While the global growth outlook has improved, risks remain, including from market stresses in Europe and the resulting 'search for strong sovereigns,'" the IMF said in a statement on the Swedish economy.

The IMF said it supported Stockholm's plans to keep domestic policies supportive although it urged them to "respond flexibly to evolving economic circumstances."

Sweden's economy was hard hit by the global downturn in 2008, but output began to rise in the middle of last year led by domestic demand.

The IMF said growth prospects are dependent on global demand for Swedish goods and investment, which are likely to lag in the recovery.

Market stress in Europe has dented growth prospects in a key export market and reversed much of the earlier depreciation in the Swedish crown, which had supported exporters.