Swedish GDP fell by 0.2 per cent in the first quarter compared to last year. In annual terms, this means a growth rate of 0.9 for Sweden, according to SCB. Expectations were at 1.7 per cent.
The overall picture is still that it's going quite slowly and a bit slower than expected in the economy, says Torbjörn Isaksson.
May lead to interest rate cut
Among the disappointments was household consumption, which fell unexpectedly. Nordea's chief analyst Torbjörn Isaksson that even if there is a gradual recovery, today's figure raises the likelihood of an interest rate cut by the Swedish Central Bank.
We do not have the forecast that the Swedish Central Bank will cut the interest rate in June, we believe that they will keep the interest rate unchanged, but today's figure has increased the likelihood that there will be an interest rate cut.
GDP written down
Besides the GDP disappointment for the first quarter, GDP figures for previous years have also been revised down. This is mainly due to the fact that exports have proven to be weaker than calculated.
The wheels are turning slower and resource utilization is lower than previously thought in the Swedish economy.
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The decline was 0.2 per cent compared to the fourth quarter last year. Analysts had on average counted on a growth rate of 0.1 per cent compared to the previous quarter.
Household consumption decreased by 0.2 per cent. Public consumption increased by 0.1 per cent. The number of employed in the entire economy decreased by 0.1 per cent.
Exports rose by 1.8 per cent and imports increased by 0.3 per cent.
What is called fixed gross investment decreased by 3.8 per cent.
In annual terms, the weak figure means a growth rate of 0.9 per cent for Sweden. Expectations were at 1.7 per cent.
Source: SCB
Nordea's forecast is still that there will be no interest rate cuts from the Swedish Central Bank this year. Sector colleagues Handelsbanken and SEB have a rate cut this year in their main forecasts, while Swedbank's forecast is two rate cuts.
