The Swedish economy shrank more than expected in the first quarter, in part as a result of sluggish export levels and upward revision of statistics in previous years.
GDP shrank by 0.8% in the quarter compared to the same period last year, for the first time since the fourth quarter of 2020.
Preliminary estimates spoke of a recession of 0.4%.
While the Nordic economy has recovered from the pandemic, households in Sweden are now feeling the effects of inflation, which has been at an all-time high for three decades.
Russia’s war with Ukraine and an expected series of interest rate hikes by the Riksbank have eroded consumer confidence.
“The decline in GDP in the first quarter is not worrying, as it is mainly attributed to external factors, with demand remaining strong,” said a Nordea economist, citing restrictions from the latest wave of the pandemic and a lack of imported goods.
He said he expects decent growth in the current quarter, as evidenced by the very strong elements of the labor market.
Net exports reduced Swedish GDP by 0.7% in the first three months of 2022, as imports increased by 2.8% compared to the previous quarter, the highest increase since the end of 2020.
Exports increased by 1%, which is the lowest percentage from the second quarter of last year.
For 2021 growth was revised upwards by 0.3% to 5.1%, while the recession of 2020 was also revised to 2.2% compared to a previous estimate of 3%.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
