Sweden: Economic growth comes to a halt on weaker net exports
March 1, 2013
In the fourth quarter, GDP was flat over the previous quarter in seasonally and working-day adjusted terms, which was below the 0.3% rise registered in the third quarter. That said, the reading widely beat market expectations that had GDP falling 0.8%. On an annual basis, the economy grew 1.5% in the fourth quarter, which was above the 0.6% rise seen in the third. In the full year 2012, the economy expanded 0.8%, well below the 3.7% registered in 2011.
The Q4 reading was mainly influenced by a deterioration in net exports. Exports of goods and services swung from a flat reading in the third quarter to a 0.9% contraction in the fourth. Simultaneously, imports improved slightly and declined 0.3% (Q3 2012: -0.5% quarter-on-quarter). As a result, the external sector's net contribution to overall economic growth fell from plus 0.2 percentage points in the third quarter to minus 0.4 percentage points in the fourth.
On the domestic side, private consumption grew 0.9% (Q3: +0.4% qoq), while government consumption added 0.4% (Q3: +0.7% qoq). In addition, gross fixed capital formation expanded 1.9%, which contrasted the 1.2% decline seen in Q3.
According to its February Monetary Policy Report, the Central Bank (Riksbank) expects economic growth to reach 1.2% in 2013 before accelerating to a 2.7% expansion in 2014 (previously forecasted: 1.2% and 2.7%, respectively). FocusEconomics Consensus Forecast panellists expect the economy to grow 1.2% in 2013, which is down 0.1 percentage points from last month's estimate. For 2014, the panel projects the economy to expand 2.3%.