GDP decreased by 0.4 percent in October compared to the previous month, according to SCB's quick indicator.
The decline was unexpected. Economists had on average expected an increase of 0.2 percent, according to Bloomberg's compilation of forecasts.
And in September, GDP fell by a revised 1.5 percent compared to the previous month.
Weak development for consumption
Torbjörn Isaksson at Nordea warns against drawing too large conclusions from the figures, as they concern monthly outcomes that are regularly revised a lot.
But he notes that household consumption continues to struggle and that there is economic stagnation and a weak labor market.
In October, consumption fell by 0.3 percent compared to the previous month, or minus 1.1 percent in annual terms, according to SCB.
Households still need support to get going again, he says.
Interest rate cuts "in good time"
The interest rate cuts made by the Swedish Central Bank so far "came in good time", according to Isaksson, and he expects the Swedish Central Bank's governor Erik Thedéen and his board to need to continue cutting interest rates deeper than the Swedish Central Bank itself expects, according to the so-called interest rate path.
Isaksson expects at least three cuts of 0.25 percentage points until the summer of 2025. This would bring the repo rate down from today's 2.75 percent to 2.00 percent.
The Swedish Central Bank's interest rate path only expects two cuts to 2.25 percent.
In the pricing of the interest rate market, the probability points to four cuts, down to 1.75 percent.
If the interest rates on a three-million-kronor mortgage were to follow down by 1 percentage point, it would reduce the interest cost by 30,000 kronor per year or 2,500 kronor per month, if one disregards the effects of interest deductions.
