Sweden: Economic growth picks up at the outset of the year
May 29, 2013
In the first quarter, GDP rose 0.6% over the previous quarter in seasonally and working-day adjusted terms, which was above the 0.1% increase registered in the fourth quarter (previously reported: 0.0% quarter-on-quarter). The reading exceeded market expectations that had GDP edging up 0.3%. On an annual basis, the economy grew 1.7% in the first quarter, which was above the 1.5% rise seen in the fourth.
The acceleration in Q1 was mainly influenced by an improvement in domestic demand. Private consumption accelerated from a 0.7% expansion in the fourth quarter to a 1.0% rise in the first. Government consumption, on the other hand, only added 0.1% (Q4 2012: +0.4% qoq). An increase in inventories contributed positively to GDP growth in the first quarter, although fixed investment fell 2.8% in the first quarter, contrasting the 0.4% expansion seen in the fourth.
On the external side, exports of goods and services fell 1.4% in Q1 (Q4: -0.8% qoq), while imports declined 1.7% (Q4: -0.6% qoq). As a result, the external sector's net contribution to overall economic growth inched up from minus 0.1 percentage points in the fourth quarter to 0.0 percentage points in the first.
According to its April Monetary Policy Update, the Central Bank expects economic growth to reach 1.4% in 2013 before accelerating to a 2.7% expansion in 2014. FocusEconomics Consensus Forecast panellists expect the economy to grow 1.3% in 2013, which is unchanged from last month's estimate. For 2014, the panel projects the economy to expand 2.4%.