Sweden GDP

GDP growth returns in Q2

Q2 outturn stronger than expected: According to the statistical office’s preliminary estimate, the economy returned to growth in seasonally adjusted quarter-on-quarter terms in Q2, expanding 1.4% following the prior quarter’s flat reading. Q2’s reading was the strongest in over two years and beat market expectations. In annual terms, seasonally adjusted GDP growth accelerated to 2.8% from Q1’s upwardly revised 2.2%.

Domestic demand likely fueled Q2’s improvement: A full breakdown of the Q2 print will not be released until 28 August. Monthly data suggests that domestic demand drove momentum: Industrial production rebounded sharply and retail sales gained steam in Q2, while merchandise export growth slowed from Q1 in April–June.

GDP growth to hit five-year high in 2026: Our Consensus is for sequential economic growth to slow from Q2 in H2, yet 2026’s expansion as a whole is still on track to be the strongest in five years, driven by accelerating domestic demand. Fixed investment should benefit from higher public spending on defense, the energy transition and AI, while private spending will benefit from pre-election fiscal stimulus, rising real incomes and stronger consumer confidence. Exports, by contrast, will struggle with weaker demand from key Swedish trading partners and higher U.S. tariffs. GDP growth in partner economies like Germany and Norway remains key to track and a prolonged Iran war is still a downside risk.

Panelist insight: EIU analysts commented on the outlook: “Growth in 2026 will be supported by investment and by stronger private consumption due to softer inflation, strong wage growth and the lagged impact of earlier monetary policy loosening. The main risks to our outlook stem from continuing uncertainty over global trade and the ongoing conflict in the Middle East.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Swedish GDP projections for the next ten years from a panel of 28 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for Swedish GDP.

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