Sweden: GDP contracts in Q1 for first time since Q4 2012
May 30, 2014
In the first quarter, the economy contracted 0.1% over the previous quarter in seasonally- and working-day adjusted terms, according to data released on 30 May. The result marked the lowest result and first contraction since Q4 2012. The figure contrasted the 1.6% expansion registered in Q4 and undershot the flat growth the market had expected. On an annual basis, the economy grew 1.8%, marking a slowdown over the 3.0% expansion in Q4.
Q1’s negative result came on the back of a moderation across most components of the domestic economy and a deterioration of the external sector. Private consumption rose only 0.6% (Q4: +0.9% quarter-on-quarter), while government spending decreased 0.1% (Q4: +0.9% qoq). Fixed investment was the only bright spot, accelerating from the 1.6% rise recorded in Q4 to a 2.1% increase in Q1.
On the external side of the economy, exports of goods and services slowed from 1.5% growth in Q4 to a 0.6% increase in Q1. Imports increased 2.0% in the first quarter (Q4: +1.3% qoq). As a result, the external sector’s net contribution to overall economic growth swung from plus 0.2 percentage points in Q4 to minus 0.5 percentage points in Q1.
Author: Carl Kelly, Economist