Sweden: GDP declines less than previously reported in Q2
A second national accounts release revealed underlying momentum weakened at a softer pace than initially reported: GDP contracted 0.8% on a seasonally adjusted quarter-on-quarter basis in the second quarter. The downturn was still a deterioration from Q1’s 0.4% increase but was an improvement from the 1.5% contraction reported in the preliminary release.
Domestically, government spending growth waned to a quarterly 0.5% in seasonally adjusted terms in Q2, down from Q1’s 0.7% expansion. More positively, fixed investment flatlined in Q2, improving from the prior quarter’s 0.9% decline. Lastly, private consumption fell a milder 0.2% in the quarter (Q1: -0.8% s.a. qoq). Total employment rose 0.4% in Q2, which, coupled with less pressure on purchasing power amid moderating inflation, likely prevented a steeper spending contraction.
On the external front, exports of goods and services swung to a 0.8% contraction (Q1: +1.0% s.a. qoq) as the steep decline in goods exports overshadowed a slight increase in services exports. Meanwhile, imports of goods and services growth slowed to a marginal 0.1% in Q2 (Q1: +0.5% s.a. qoq). Consequently, the external sector detracted 0.5 percentage points from the overall result.
On an annual basis, GDP declined 0.7% in Q2, swinging from the previous period’s 0.9% rise.