Sweden: Economy expands amid increased fixed investment
November 29, 2013
In the third quarter, GDP expanded 0.1% over the previous quarter in seasonally and working-day adjusted terms, according to data released on 29 November. The figure contrasted the 0.1% contraction recorded in the second quarter, but undershot market expectations of 0.5% growth. On an annual basis, the economy grew 0.3%, marking a deterioration over the 0.6% expansion in Q2.
The expansion in Q3 came on the back of improving fixed investment, which accelerated from a 0.4% increase in Q2 to a 1.2% expansion in Q3. Conversely, total consumption inched down from a 0.3% expansion in Q2 to a 0.2% increase in Q3. Private consumption was unchanged at Q2's 0.3% expansion, while government consumption added 0.1% (Q2: +0.3% quarter-on-quarter).
On the external side of the economy, exports of goods and services fell 0.8% in Q3 (Q2: -0.2% qoq). In addition, imports growth deteriorated from a 0.2% contraction in the second quarter to a 1.2% fall in the third quarter. The external sector's net contribution to overall economic growth inched up from zero percentage points in Q2 to 0.1 percentage points in Q3.
According to its September Monetary Policy Update, the Central Bank expects economic growth to reach 0.7% in 2013, before accelerating to 2.6% in 2014. FocusEconomics Consensus Forecast panelists expect the economy to grow 1.0% in 2013, which is unchanged from last month's estimate. For 2014, the panel projects that the economy will expand 2.4%, which is also unchanged from last month's estimate.
Author: Dirina Mançellari, Senior Economist