Sweden Economic Forecast

Sweden Economic Outlook

February 26, 2019

Economic growth in quarter-on-quarter terms was likely solid in Q4, although this was in part due to a favorable base of comparison after temporary factors saw the economy contract in Q3. Underlying economic momentum appeared to ebb, however, as evidenced by a slump in retail sales, lower average PMI readings compared to the previous quarter and sluggish growth in industrial production. Turning to Q1, available data points to a moderation in activity, in line with soft dynamics across the EU as a whole. Both the services and manufacturing PMIs declined in January, while the economic tendency indicator dropped sharply in the same month on worse sentiment in the manufacturing, retail and service sectors. Nevertheless, the labor market continues to perform well, as evidenced by robust annual employment growth in January.

Sweden Economic Growth

Growth is set to slow notably this year, amid weaker Eurozone prospects and soft housing investment. However, the strong labor market and mild inflation should buoy private consumption, while government consumption should benefit from the new government’s more expansionary fiscal stance. Elevated household debt, meanwhile, poses a downside risk to the outlook. FocusEconomics panelists see GDP rising 1.6% in 2019, down 0.1 percentage points from last month’s forecast, and 1.8% in 2020.

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Sweden Facts

ValueChangeDate
Bond Yield0.30-4.79 %Mar 11
Exchange Rate9.38-0.20 %Mar 11
Stock Market1,5700.14 %Mar 11

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