Sweden Current Account Balance (% of GDP)

According to a second national accounts release, the economy declined 0.5% in sequential terms in the final quarter of 2022, a marginal improvement from the preliminary estimate (Q3: +0.3% s.a. qoq) the. The downturn was chiefly due to fixed investment swinging to a contraction in Q4. Private consumption also declined, albeit at a milder pace than in Q3. The outlook for Q1 2023 got rosier: GDP expanded 2.0% month on month in January (December: -0.7% mom), marking the strongest expansion in four months and hinting at strong momentum. Moreover, private consumption grew by 0.5% month on month in January, defying still-intense price pressures. That said, challenges remain. Both the manufacturing and services PMIs were entrenched in contractionary territory in February, revealing sharp deterioration in conditions.