Sweden: Q3 GDP growth takes market by surprise
Stronger-than-expected GDP growth in the third quarter: In Q3, the economy gained traction. The statistical office’s preliminary estimate for GDP growth surprised markets to the upside: The economy grew 1.1% in seasonally adjusted quarter-on-quarter terms in the third quarter (Q2: +0.6% qoq s.a.), hitting an over two-year high.
In annual terms, seasonally adjusted GDP growth ticked up to 2.2% following Q2’s 1.7% rise, revealing that the economy is faring better than H1 in H2.
Private consumption growth outweighs net export drag: While a full breakdown has yet to be published, the acceleration appears to have been driven by a strong performance in household spending in August. Monthly data suggests that private consumption growth picked up enough to offset the drag from net exports throughout the quarter.
A more comprehensive breakdown of national accounts data for Q3 will be released on 28 November.
Growth to ease ahead: Our panelists expect economic growth to lose traction in sequential terms from Q3’s level in the upcoming quarters, while maintaining healthy momentum. Consequently, GDP growth is expected to accelerate to a five-year high in 2026 on the back of stronger domestic demand. A protracted malaise in the German manufacturing sector and global trade frictions pose downside risks to the outlook.
Panelist insight: Nordea’s Torbjörn Isaksson commented:
“All in all, the flash came out above forecasts, but a healthy reading was in the cards after the recent improvement in hard data. The flash is often revised, but there are reasons to believe that the recovery is taking hold.”