Sweden: Economic growth slows in Q2
July 29, 2016
According to preliminary data released by Statistics Sweden, the economy lost steam in the second quarter of 2016. GDP increased a seasonally-adjusted 0.3% in Q2 over the previous quarter, inching down from Q1’s revised 0.4% expansion (previously reported: +0.5% quarter-on-quarter). The print fell significantly short of the 0.7% growth analysts had expected. Despite the slowdown, Sweden remains one of the fastest-growing economies in Western Europe.
Q2’s deceleration came on the back of feeble growth in domestic demand. Private consumption expanded only 0.4% in Q2, which was down from Q1’s 1.0% increase. Moreover, fixed investment decelerated sharply and stagnated in Q2, after recording a 1.9% expansion in Q1. The only positive news came from government consumption, which inched up from a 0.5% rise in Q1 to a 0.6% increase in Q2.
On the external side of the economy, exports of goods and services fell 0.3% quarter-on-quarter, which was nonetheless an improvement on the 1.5% slump registered in Q1. Imports grew 0.3% in Q2, decelerating from Q1’s 0.6% expansion. As a consequence, the external sector’s net contribution to overall economic growth improved from minus 0.9 percentage points in Q1 to minus 0.3 percentage points in Q2.
Compared to the same period last year, the economy grew 3.1% in Q2, which was well below Q1’s 4.1 rise.
Author: Robert Hill, Economist