Sweden Domestic Demand (ann. var. %)

Economy declines at close of 2022

A second national accounts release revealed underlying momentum was set back in the fourth quarter of 2022; the economy contracted 0.5% in seasonally adjusted quarter-on-quarter terms, down from the 0.3% expansion tallied in the previous quarter. The outturn came in 0.1 percentage points above the preliminary estimate.

Domestically, the sequential downturn chiefly reflected fixed investment swinging to a contraction; it fell 1.0% in Q4, contrasting the 0.5% increase logged in the previous quarter. Moreover, government consumption growth edged down to 0.2% in Q4 (Q3: +0.5% s.a. qoq). Lastly, private consumption slid at a softer pace of 0.4% on a seasonally adjusted quarter-on-quarter basis in Q4 compared to a 1.8% contraction in Q3.

On the external front, exports of goods and services growth waned to 0.5% in the fourth quarter (Q3: +2.8% s.a. qoq). Meanwhile, imports of goods and services deteriorated, contracting 0.9% in Q4 (Q3: +1.1% s.a. qoq). Consequently, the external sector contributed 0.6 percentage points to the overall reading, a slight deterioration from the prior period’s 0.8 percentage point addition.

On an annual basis, GDP posted a marginal 0.1% contraction in Q4, contrasting the previous period’s 2.5% growth. The fourth quarter’s result brought overall growth for 2022 to 2.7%, nearly halving from the 5.2% post-pandemic rebound in 2021.