Conditions for higher consumption are in place. Lower taxes, a halving of food VAT and strong real wage growth over the past year have increased the average household's cash.
But soaring electricity and fuel prices, along with broader global concerns, slowed the consumption growth seen last year.
The Swedish Trade Research Institute (HUI) still expects a fairly good pace of growth going forward.
"Retail continues to develop positively, and several sub-sectors are showing signs that the recovery has gained a broader foothold. HUI assesses that the positive forces currently outweigh the risks," the economic report says.
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