Sweden economy in low gear but shows signs of recovery, Finance Minister says

Adds possible effect of U.S. tariffs in paragraph 3

STOCKHOLM, Feb 12 (Reuters) - Sweden's economy remains in low gear but there are signs that activity is picking up, Swedish Finance Minister Elisabeth Svantesson said on Wednesday.

"Sweden has good potential for an economic recovery," Svantesson told reporters. "We can see now the first signs."

She played down the effects of tariffs threatened by the administration of U.S. President Donald Trump, saying that estimates put the impact at less than 0.1% of GDP.

"Tariffs are bad, but we can cope with them nevertheless, I believe," Svantesson said, adding that the current uncertainty about tariffs and the unpredictability of the U.S. administration were almost as bad as tariffs themselves.

Germany, where the economy could contract for a third year in a row and which faces possibly months of party-political horse trading after an election on Feb. 23, is more important.

"The development of the German economy affects us to a very great extent," Svantesson said.