Sweden's gross national product (GNP) increased by 0.8 percent in the fourth quarter of 2024 compared to the previous quarter, according to figures from the Statistics Sweden (SCB).
The figure was thus higher than the market's expectations, which were at 0.3 percent according to Bloomberg's compilation.
The recovery has begun in the Swedish economy, says Torbjörn Isaksson, chief analyst at the major bank Nordea.
Domestic demand is increasing and so is exports – so it's a fairly broad upturn, he says about the fourth quarter.
Soon time for interest rate decision
The Swedish Central Bank's next interest rate decision will be made on March 20. There are currently no expectations of further interest rate cuts then, and a boost to the Swedish economy can in theory contribute to future interest rate cuts being postponed. The assessment is currently divided among economists:
- Our previous forecast was a cut in May. With this outcome, the likelihood increases that the cut will come later rather than sooner, says Susanne Spector, chief economist at Danske Bank.
Torbjörn Isaksson, in turn, believes that today's GNP figure contributes to the picture that the Swedish Central Bank is done with interest rate cuts for the year.
His colleague at Norwegian DNB, macro analyst Thomas Jellvik, has the same assessment regarding interest rate developments in 2025. Jellvik, however, raises a warning finger about reading too much into today's figures:
It's going in the right direction for the Swedish economy, but this is statistics that applies to last year. If we look at the statistics we've received so far regarding 2025, with retail trade and the business cycle barometer from the National Institute of Economic Research, they're not as convincing, he says to TT.
Decline for retail trade
In a separate report from SCB, among other things, a decline for retail trade in January with 0.7 percent compared to the previous month is reported. For the economic growth to continue to take off, it is primarily a crucial factor, according to Jellvik.
Will they live up to the growth expectations for 2025? It depends entirely on what happens with private consumption, for that is what is expected to be the contributing factor, he says.
