Economic growth fails to meet expectations and declines in Q4 according to advanced data
The Swedish economy was not able to avert a contraction in the final quarter of 2022. GDP declined 0.6% in seasonally adjusted quarter-on-quarter terms, according to preliminary figures released by Statistics Sweden. The result more than offset the 0.2% sequential growth posted in the prior quarter and surprised market analysts on the downside; a 0.2% increase had been priced in.
Meanwhile, in calendar-adjusted annual terms, GDP slid 0.6% in the fourth quarter, swinging from the prior quarter’s 2.3% expansion. The reading came in markedly below the 1.2% increase markets had expected. Q4’s preliminary estimate would bring overall growth in the Swedish economy for 2022 to 2.4%—half the level of the previous year’s 4.8% growth..
Although details of the release are still pending, consumer spending was likely restrained in the final three months of the year, pressured by diminished purchasing power. The unemployment rate increased in Q4, while consumer price inflation with a fixed interest rate accelerated to a multi-decade high. Additionally, the Riksbank hiked the policy rate to the highest level in 14 years, which should have dampened credit growth. Partly as a result of this, both consumer and business sentiment remained very pessimistic through December. On a brighter note, continued nominal wage growth through November should have provided some support.
A more comprehensive breakdown of Q3 2022 GDP will be released on 28 February.
Sweden Government Consumption (ann. var. %) Data
|Government Consumption (ann. var. %)||0.6||1.0||0.3||-2.0||2.4|