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Sweden Economic Forecast

Sweden Economic Outlook

Q2’s sequential economic downturn was softer than initially estimated, a second national accounts release showed. The GDP deterioration was chiefly due to the external sector, as growth in imports contrasted a drop in exports. On the domestic front, fixed investment flatlined quarter on quarter following Q1’s decline, while private consumption fell at a milder pace than in Q1; increasing employment, softer price pressures and continued nominal wage growth likely alleviated pressure on consumers’ budgets and prevented a sharper spending contraction. Meanwhile, the economy is expected to be entering a technical recession, with GDP dropping—albeit by less than in Q2—in Q3. That said, available data paints a more optimistic picture: GDP grew 0.5% month on month in July, and private spending returned to growth in the same month as inflation receded further.

Sweden Inflation

Consumer price inflation with a fixed interest rate (CPIF) fell to an over one-year low of 4.7% in August (July: 6.4%). In the remaining months of 2023, CPIF is expected to ease slightly from current levels amid tighter monetary policy and sluggish activity. This year, CPIF will soften from 2022 but still be more than triple the Riksbank’s 2.0% target.

This chart displays Economic Growth (GDP, annual variation in %) for Sweden from 2013 to 2022.

Sweden Economic Data

2018 2019 2020 2021 2022
Population (million) 10.2 10.3 10.4 10.5 10.5
GDP (USD bn) 555 534 547 639 591
GDP per capita (USD) 54,257 51,697 52,741 61,154 56,158
GDP (EUR bn) 470 477 480 541 562
GDP per capita (EUR) 45,986 46,187 46,264 51,732 53,427
GDP (SEK bn) 4,828 5,050 5,039 5,487 5,979
Economic Growth (Nominal GDP, ann. var. %) 4.4 4.6 -0.2 8.9 9.0
Economic Growth (GDP, ann. var. %) 2.0 2.0 -2.3 5.9 2.9
Domestic Demand (ann. var. %) 1.7 0.2 -2.3 6.1 3.6
Private Consumption (ann. var. %) 1.8 0.7 -3.2 6.3 1.9
Government Consumption (ann. var. %) 1.0 0.3 -2.0 2.9 0.1
Fixed Investment (ann. var. %) 1.4 -0.3 1.6 6.8 6.2
Exports (G&S, ann. var. %) 4.4 6.1 -5.9 10.8 7.1
Imports (G&S, ann. var. %) 4.0 2.2 -6.3 11.3 9.4
Industrial Production (ann. var. %) 2.6 2.4 -4.9 7.0 2.1
Retail Sales (ann. var. %) 1.5 2.5 2.0 6.1 -2.3
Home Prices Index (ann. var. %) 0.3 2.2 6.8 16.6 4.9
Disposable Income (ann. var. %) 2.2 2.4 -0.5 4.0 0.0
Wages (ann. var. %) 2.6 2.6 2.1 2.6 2.7
Unemployment (% of active population, aop) 6.5 7.0 8.5 8.8 7.5
Fiscal Balance (% of GDP) 0.8 0.6 -2.8 0.0 0.7
Public Debt (% of GDP) 39.5 35.5 39.8 36.5 33.0
Money (ann. var. of M2 %) 6.7 7.1 18.4 11.7 2.2
Inflation (CPI, ann. var. %, eop) 2.0 1.8 0.5 3.9 12.3
Inflation (CPI, ann. var. %, aop) 2.0 1.8 0.5 2.2 8.4
Inflation (CPIF, ann. var. %) 2.2 1.7 0.5 4.1 10.2
Inflation (CPIF, ann. var. %, aop) 2.1 1.7 0.5 2.4 7.7
Inflation (PPI, ann. var. %, aop) 6.6 3.0 -3.4 10.7 21.4
Riksbank's Policy Rate (%, eop) -0.50 -0.25 0.00 0.00 2.50
3-Month STIBOR (%, eop) -0.13 0.15 -0.05 -0.05 2.70
10-Year Bond Yield (%, eop) 0.45 0.14 0.03 0.29 2.37
Stock Market (ann. var. of OMXS30 %) -10.7 25.8 5.8 29.1 -15.6
Exchange Rate (SEK per USD, eop) 8.87 9.36 8.21 9.05 10.42
Exchange Rate (SEK per USD, aop) 8.70 9.46 9.20 8.58 10.12
Exchange Rate (SEK per EUR, eop) 10.13 10.51 10.05 10.30 11.12
Exchange Rate (SEK per EUR, aop) 10.26 10.59 10.49 10.15 10.64
Current Account Balance (EUR bn) 11.7 25.5 28.3 36.7 27.1
Current Account Balance (% of GDP) 2.5 5.3 5.9 6.8 4.8
Merchandise Trade Balance (EUR bn) 9.4 18.5 19.0 22.9 19.7
Foreign Direct Investment (EUR bn) 4.5 7.8 18.9 17.9 43.7

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