Wednesday May 30 2018
Swedish GDP Grows 0.7% QoQ in Q1
Statistics Sweden | Luisa Carvalho |

The Swedish economy advanced by 0.7 percent on quarter in the first three months of 2018, the same pace as in the previous three-month period and above market expectations of a 0.5 percent rise. Household consumption rose faster and fixed investment rebounded.

Household consumption went up by 0.8 percent in the first quarter of 2018, following a 0.7 percent increase in the previous period. Also, gross fixed capital formation rebounded significantly (2.8 percent vs -0.8 percent in Q4) and changes in inventories added 0.1 percentage points to GDP growth. Meanwhile, government spending rose at a softer 0.1 percent (0.2 percent in Q4).

Net external demand contributed negatively, as exports fell 0.2 percent (2.0 percent in Q4) while imports advanced 1.0 percent (the same pace as in Q4).

On the production side, production of goods went up by 1.1 percent (1.3 percent in Q4) and service producing industries rose by 1.2 percent (0.6 percent in Q4).

Employment, measured as the total number of hours worked, was unchanged, and the total number of persons employed increased by 0.6 percent, seasonally adjusted.

Year-on-year, the GDP grew 3.3 percent after a downwardly revised 2.9 percent in the fourth quarter, but slightly below market estimates of 3.4 percent.




Thursday April 26 2018
Sweden Holds Key Interest Rate at -0.5%
Riksbank | Joana Ferreira |

The central bank of Sweden held its benchmark interest rate at -0.5 percent on April 26th, as widely expected, saying underlying inflation has been somewhat lower than expected recently, which raises questions regarding the strength of the development in inflation. Also, the central bank added that the repo rate will begin to increase towards the end of the year, which is somewhat later than previously forecast.

Excerpts from the Statement by the Executive Board of the Riksbank:

The overall picture of the economic outlook and inflation prospects remains largely unchanged since the monetary policy meeting in February. Economic activity abroad is continuing to strengthen. However, despite growth being at a high level and unemployment having fallen, inflationary pressures remain moderate, particularly in the euro area.

Conditions in the Swedish economy are strong; the employment rate is high and unemployment has fallen to the lowest level since the financial crisis. Inflation has been close to the target over the past year. In March, CPIF inflation was 2.0 per cent.

One reason why inflation is now 2 per cent is that energy prices have increased rapidly. Underlying inflation, on the other hand, has been unexpectedly low recently, which raises questions regarding the strength of the development in inflation. The weakening of the krona exchange rate in recent months is contributing to higher inflation, but if CPIF inflation is to remain close to the target going forward, it is important that economic activity is strong and has an impact on price developments. It is also important that the krona exchange rate develops in a way compatible with inflation stabilising close to the target.

Monetary policy therefore needs to remain expansionary and the Executive Board has decided to hold the repo rate unchanged at −0.50 per cent. Given the questions regarding underlying inflation, the forecast for the repo rate has been revised down somewhat and indicates that the rate will start to be raised at a slow pace towards the end of the year. The Riksbank’s holdings of government bonds amount to just over SEK 320 billion, expressed as a nominal amount. Until further notice, redemptions and coupon payments will be reinvested in the bond portfolio.

It has taken a long time to bring up inflation and inflation expectations, and there is considerable uncertainty over the development of inflation. Monetary policy thus needs to proceed cautiously. If the conditions for inflation were to change, the Executive Board is prepared to adjust monetary policy. The risks of too low inflation merit particular attention, as at the prevailing interest rate levels this is more difficult to manage than inflation that is too high.

The low interest rates contribute to increasing the risks linked to high and rising household indebtedness. At the same time, the fundamental causes of the high household indebtedness still remain. Achieving long-term sustainable development in the Swedish economy therefore requires measures within housing policy, taxation policy and, where necessary, within macroprudential policy.




Wednesday February 28 2018
Swedish Economy Grows 0.9% in Q4
Statistics Sweden | Joana Ferreira |

The Swedish economy grew by 0.9 percent on quarter in the last three months of 2017, following a 0.8 percent expansion in the previous period and missing market expectations of 1 percent.

Household consumption rose by 0.6 percent in the fourth quarter, following a 0.5 percent increase in the previous period. In addition, changes in inventories added 0.3 percentage points to GDP growth, while government spending growth slowed to 0.2 percent from 0.5 percent in the third quarter and gross fixed capital formation shrank 1.3 percent (vs 3.8 percent in Q3).

Net external demand contributed positively, as exports jumped 2.4 percent (vs 0.2 percent in Q3) while imports rose at a softer 1.2 percent (vs 1.4 percent in Q3).

On the production side, production of goods increased by 1.3 percent (vs 0.9 percent in Q3) and service-producing industries grew by 0.6 percent (vs 0.9 percent in Q3).

Employment, measured as the total number of hours worked, increased by 1.0 percent, seasonally adjusted and the total number of persons employed rose by 0.4 percent.

Year-on-year, the GDP rose by 3.3 percent after an increase of 2.9 percent in the third quarter, but slightly below market consensus of 3.4 percent.


Wednesday February 14 2018
Sweden Leaves Rates Steady, Cuts Inflation Forecasts
Riksbank | Joana Taborda |

The central bank of Sweden held its benchmark interest rate at -0.5 percent on February 14th 2018, in line with market expectations, saying the economic activity in Sweden is strong and inflation is close to the 2 percent target. However, inflation forecasts for 2018 were revised down to 1.7 percent from 2 percent. Policymakers also reinforced that slow repo rate rises are set to be initiated during the second half of 2018.

The central bank also lowered inflation forecasts for 2019 to 2.6 percent from 2.8 percent but left 2020's unchanged at 3.1 percent. GDP growth is seen at 2.8 percent in 2018, slightly below earlier estimates of 2.9 percent. For 2019, growth is seen higher at 1.8 percent (1.7 percent earlier estimated) and for 2020 it was left unchanged at 2.1 percent.

Excerpts from the Statement by the Executive Board of the Riksbank:

For inflation to remain close to target going forward, it is important that economic activity continues to be strong and has an impact on price development, and that the Swedish krona does not strengthen too quickly. Monetary policy therefore still needs to be expansionary.

In light of this, the Executive Board has decided to hold the repo rate unchanged at −0.50 per cent. The forecast for the repo rate is unchanged since December and indicates that slow increases are set to be initiated during the second half of this year. The Riksbank's net purchases of government bonds amount to just over SEK 310 billion, expressed as a nominal amount. Until further notice, redemptions and coupon payments will be reinvested in the bond portfolio.

According to the Riksbank's forecast, the appropriate time is approaching to slowly begin raising the repo rate. But it is important not to raise the rate too early. Economic activity is strong and inflation has been close to 2 per cent for some time, but the lower inflationary pressures create uncertainty over how inflation will develop going forward. It is also important that the krona does not appreciate too quickly. It has taken a long time to bring inflation and inflation expectations back to 2 per cent, and the uncertainty surrounding the development of inflation means that monetary policy needs to proceed cautiously. If conditions were to change, the Executive Board is, as before, prepared to implement further monetary policy easing.


Wednesday December 20 2017
Sweden Holds Key Interest Rate at -0.5%
Riksbank | Joana Ferreira |

The central bank of Sweden held its benchmark interest rate at -0.5 percent on December 20th, 2017, as widely expected, saying monetary policy needs to remain expansionary for inflation to continue to be close to the 2 percent target. Also, the central bank added that it expects to begin slowly raising the repo rate in the middle of 2018.

Excerpts from the Statement by the Executive Board of the Riksbank:

The economic prospects and outlook for inflation in Sweden are largely unchanged from October. Economic activity is strong and the employment rate is high. Although the decline in housing prices is expected to dampen housing investment in the coming years, the effects on GDP growth will be partly counteracted by the stronger demand from abroad.

Although inflation has now been close to 2 per cent for some time, prior to this it was below the target for a long time. It has required a great deal of support from monetary policy to bring up inflation and inflation expectations. Economic activity needs to remain strong for inflation to continue to be close to the target. It is also important that the krona does not appreciate too quickly.

The Executive Board of the Riksbank has therefore decided to hold the repo rate unchanged at −0.50 per cent and is expecting, as before, to begin slowly raising the repo rate in the middle of 2018. The Riksbank's net purchases of government bonds will amount to a nominal value of SEK 290 billion at the end of 2017. Redemptions and coupon payments in the government bond portfolio will be reinvested until further notice. Large redemptions, amounting to around SEK 50 billion, will occur during the first half of 2019. In addition, there are coupon payments totalling around SEK 15 billion from January 2018 to June 2019. To retain the Riksbank's presence on the market and attain a relatively even rate of purchase going forward, the reinvestments of these redemptions and coupon payments will begin as early as January 2018 and continue until the middle of 2019. This means that the Riksbank's holdings of government bonds will increase temporarily in 2018 and the beginning of 2019.

Just as before, the Riksbank is prepared to implement further monetary policy easing if necessary to stabilise inflation and safeguard the inflation target. All of the tools that the Riksbank has described earlier can be used if necessary.

Monetary policy safeguards the inflation target's role as nominal anchor for price and wage formation and thereby contributes to the positive development of the economy. But the low interest rates at the same time contribute to increasing the risks linked to high and rising household indebtedness. To achieve long-term sustainable development in the Swedish economy, these risks need to be managed via measures within housing policy, taxation policy and, if necessary, macroprudential policy.


Wednesday November 29 2017
Swedish Economy Expands 0.8% in Q3
Statistics Sweden | Joana Ferreira |

The Swedish economy advanced 0.8 percent on quarter in the three months to September 2017, easing from a downwardly revised 1.2 expansion in the previous period and matching market expectations. Growth was driven by fixed investment while household consumption rose at a softer pace and net external demand contributed negatively.

Gross fixed capital formation grew sharply by 3.9 percent after an increase of 1.7 percent in the previous period; while changes in inventories subtracted 0.1 percentage points to the growth. Government spending went up 0.4 percent, following a 0.3 percent advance in Q2; and household consumption growth slowed to 0.4 percent in the third quarter from 0.8 percent in the previous period.

Net external demand contributed negatively, as imports jumped 1.6 percent (2 percent in Q2) while exports rose at a softer 0.7 percent (2.7 percent in Q2).

On the production side, production of goods increased by 0.7 percent (2.1 percent in Q2) and service-producing industries grew by 0.8 percent (0.9 percent in Q2).

Employment measured as total number of hours worked increased by 0.5 percent seasonally adjusted and total number of persons employed rose by 0.4 percent.

Year-on-year, the GDP advanced 2.9 percent, following a downwardly revised 2.7 percent growth in the previous period and missing market expectations of 3.6 percent.


Tuesday November 28 2017
Swedish Trade Gap Narrows in October
Statistics Sweden | Joana Ferreira |

The Swedish trade deficit narrowed to SEK 3.1 billion in October 2017 from SEK 3.5 billion in the same month a year earlier.

In October, Swedish exports of goods increased by 10 percent year-on-year to SEK 114.3 billion, while imports of goods rose by 10 percent to SEK 117.4 billion.

Trade with countries outside the EU resulted in a surplus of SEK 14.3 billion, while EU trade resulted in a deficit of SEK 17.4 billion.

Seasonally adjusted, the net trade deficit amounted to SEK 0.7 billion in October, compared with a deficit of SEK 0.6 billion in the previous month. The corresponding figure for August 2017 was a deficit of SEK 0.6 billion.

Considering January to October, the country's trade gap narrowed to SEK 4.3 billion from SEK 11.2 billion in the same period of 2016. Exports increased by 11 percent from the previous year to SEK 1074.0 billion and imports rose by 10 percent to SEK 1078.3 billion.




Thursday October 26 2017
Sweden Trade Surplus Narrows Slightly
Statistics Sweden | Joana Taborda |

Swedish trade surplus decreased slightly to SEK 2.6 billion in September of 2017 from SEK 2.7 billion a year earlier with both exports and imports rising 3 percent. The number of weekdays in September 2017 was one less than in September 2016.

Year-on-year, exports went up 3 percent to SEK 111 billion and imports also increased 3 percent to SEK 108.4 billion. Trade with countries outside the EU resulted in a surplus of SEK 15.2 billion, while EU trade resulted in a deficit of SEK 12.6 billion.

Seasonally adjusted, the net trade deficit amounted to SEK 0.5 billion in September 2017, compared with a deficit of SEK 0.8 billion in August 2017.

Considering the first nine months of the year, both exports and imports rose 10 percent over a year earlier to SEK 956.0 billion and SEK 959.0 billion respectively. The country's trade deficit narrowed to SEK 3.0 billion from a SEK 7.7 billion gap in the first nine months of 2016.


Thursday October 26 2017
Sweden Leaves Monetary Policy Unchanged
Riksbank | Joana Taborda |

The central bank of Sweden held its key repo rate steady at -0.5 percent on October 26th, 2017, in line with market expectations. Policymakers said economic activity is strong and inflation is close to the target although monetary policy needs to remain expansionary for inflation to continue to be close to 2 percent. The central bank added that it does not expect to raise the repo rate until the middle of 2018 and that purchases of government bonds will continue during the second half of 2017, as decided in April.

Excerpts from the Statement by the Executive Board of the Riksbank:

Economic activity is strong and inflation is close to the target of 2 percent. Monetary policy needs to remain expansionary for inflation to continue to be close to 2 percent. The Executive Board of the Riksbank has therefore decided to hold the repo rate unchanged at −0.50 per cent and is expecting, as before, not to raise it until the middle of 2018. The purchases of government bonds will continue during the second half of 2017, as decided by the Executive Board in April. As the present asset purchase programme will run for the remainder of the year, it will provide an opportunity to await further information that could affect a decision in December to possibly extend the purchases. The Executive Board has also taken a decision to extend the mandate that facilitates a quick intervention on the foreign exchange market.

Developments since September have been in line with the Riksbank's forecasts both abroad and in Sweden. The international recovery is continuing, but global inflationary pressures are subdued and the level of interest rates is low. The normalisation of monetary policy abroad is expected to take time.

The Riksbank's monetary policy has contributed to economic activity in Sweden being strong. The employment rate is historically high. Inflation has risen and was 2.3 per cent in September. Above all, prices for services have increased rapidly, which reflects the way in which the strong economic activity is having a greater impact on the rate of price increases.


Wednesday September 27 2017
Swedish Trade Deficit Narrows in August
Statistics Sweden | Joana Ferreira |

The Swedish trade deficit narrowed to SEK 5.4 billion in August 2017 from SEK 10.1 billion in the same month a year earlier.

In August, Swedish exports of goods increased by 13 percent year-on-year to SEK 99.9 billion, while imports of goods rose at a slower 7 percent to SEK 105.3 billion.

Trade with countries outside the EU resulted in a surplus of SEK 7.3 billion, while EU trade resulted in a deficit of SEK 12.7 billion.

Seasonally adjusted, the net trade deficit amounted to SEK 0.5 billion in August 2017, compared with a deficit of SEK 0.6 billion in July 2017. The corresponding figure for June 2017 was a deficit of SEK 0.7 billion.

Considering the first eight months of the year, the country's trade gap narrowed to SEK 0.7 billion from a SEK 9.0 billion in the same period of 2016. Exports increased by 12 percent from the previous year to SEK 847.3 billion and imports rose by 10 percent to SEK 848.0 billion.