Sweden: Economy loses momentum in Q3
Underlying momentum moderated marginally in the third quarter; GDP expanded 0.6% in seasonally adjusted quarter-on-quarter terms, down from the 0.7% increase tallied in the prior quarter. The outturn came in 0.1 percentage points below the preliminary estimate. On an annual basis, economic growth softened to 2.6% in Q3, compared to the previous period’s 4.0% expansion. Q3’s reading marked the weakest since Q1 2021.
Domestically, the quarterly easing was largely due to a seasonally adjusted quarterly 0.2% decline in private consumption in Q3, which contrasted with the second quarter’s 0.8% expansion. The improvement in the unemployment rate (Q3: 7.0%; Q2: 7.7%) and the 0.5% increase in employed people failed to shield consumers from higher price pressures in the period fully, but likely prevented a larger contraction nonetheless. In addition, fixed investment growth fell to 1.2% in Q3, marking the softest reading since Q4 2021 (Q2: +3.3% s.a. qoq). More positively, public consumption rebounded, growing 0.4% in Q3 (Q2: -0.3% s.a. qoq).
The external sector detracted from overall growth. Exports of goods and services growth fell to 0.5% in Q3, marking the weakest result since Q2 2021 (Q2: +0.8% s.a. qoq). Similarly, imports of goods and services growth softened to 1.0% in Q3 (Q2: +1.7% s.a. qoq). Consequently, the external sector detracted 0.2 percentage points from the overall reading, improving slightly from the prior quarter’s 0.3 percentage point detraction.