Sweden: GDP decelerates in Q1
May 29, 2015
In the first quarter, the economy grew 0.4% over the previous quarter in seasonally- and working-day adjusted terms, according to data released on 29 May. The figure marked a deceleration compared to the 0.8% expansion tallied in Q4 2014 (previously reported: +1.1% quarter-on-quarter). The reading was the lowest since Q2 2013 and slightly undershot market expectations of a 0.5% expansion. The tally was the result of a sharp deceleration in domestic demand, which offset an improvement in the external sector. On an annual basis, the economy grew 2.5%, slightly below the 2.6% expansion registered in Q4.
Domestically, private consumption recorded a 0.1% expansion in Q1, down from a significant 1.3% increase in Q4 (previously reported: +0.9% qoq).This marked the lowest growth in private consumption in over three years. Fixed investment plummeted from a 2.8% increase in Q4 to a 0.1% contraction in Q1. Government spending slowed to a 0.1% increase in Q1 (Q4: +0.7% qoq).
On the external side of the economy, exports of goods and services plunged to a 0.7% contraction, contrasting the 2.9% rise in Q4. Imports registered a sharper slump, contracting 1.5% in Q1 (Q4: +4.3% qoq). As a result of the drastic decrease in imports, the external sector’s net contribution to overall economic growth swung from minus 0.4 percentage points in Q4 to plus 0.3 percentage points in Q1.
Author: Robert Hill, Economist