Sweden Economic Forecast

Sweden Economic Outlook

September 25, 2018

Comprehensive figures show Sweden’s economy performed well in the second quarter, although growth for the first half of the year was revised down notably from initial estimates. In Q2, the economy was driven by solid private consumption gains—likely thanks to a strong labor market—and an improvement in the external sector. Looking ahead to the third quarter, the outlook seems fairly positive. The economic tendency indicator rose for the third straight month in August and hints at much stronger growth than normal, buoyed by optimism in the manufacturing sector. In addition, employment growth remains robust. On the other hand, the unemployment rate has ticked up slightly so far in Q3 due to a larger workforce and matching problems in the labor market, while industrial production declined over the previous month in July. Moreover, in the political arena, general elections on 9 September resulted in a fractured parliament with uncertainty over the composition of the next government. Despite this, the economic fallout from greater political instability should be minimal.

Sweden Economic Growth

Looking ahead, growth prospects are sound thanks to strong fixed investment and faster wage growth. However, weaker residential investment and slower growth in key trading partners will likely dampen activity, while elevated household debt poses a downside risk. FocusEconomics panelists see GDP rising 2.7% in 2018 and 2.1% in 2019, unchanged from last month’s forecast.

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Sweden Facts

ValueChangeDate
Bond Yield0.72-4.79 %Oct 12
Exchange Rate8.96-0.20 %Oct 12
Stock Market1,5360.14 %Oct 12

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