Tuesday November 29 2016
Swedish Economy Expands 0.5% In Q3
Statistics Sweden | Yekaterina Guchshina | yekaterina@tradingeconomics.com

Sweden's gross domestic product advanced 0.5 percent in the third quarter of 2016, following an upwardly revised 0.6 percent expansion in the second quarter and in a line with market expectations, according to preliminary estimates. Household consumption rebounded and net external demand contributed positively while fixed investment and government expenditure were unchanged. On a yearly basis, the economy advanced 2.8 percent, easing from an upwardly revised 3.6 percent growth in the previous period and below market expectations of 3 percent.

On a seasonally adjusted basis, household consumption expanded 0.4 percent (-0.1 percent in Q2); while fixed investment remained unchanged (+1.9 percent in Q2); and general government expenditure also showed no growth (+1.2 percent in Q2). 

Net external demand contributed positively, as exports rose 1.3 percent (-0.4 percent in Q2) while imports grew 0.6 percent (+0.6 percent in Q2).

On the production side, service-producing industries increased by 0.7 percent (+1.4 percent in Q2) and production of goods rose by 0.2 percent (-1.1 percent in Q2). 

Employment measured as the total number of hours worked decreased by 0.1 percent and the number of persons employed fell by 0.3 percent.




Monday November 28 2016
Swedish Trade Gap Narrows In October
Statistics Sweden | Yekaterina Guchshina | yekaterina@tradingeconomics.com

Swedish trade deficit decreased to SEK 2.7 billion in October of 2016 compared to a SEK 3.1 billion gap in the same month a year earlier.

The value of exports in October 2016 amounted to SEK 102.9 billion, while imports were valued at SEK 105.6 billion. Compared to October 2015, exports and imports decreased by 1 percent.

Trade with countries outside the EU resulted in a surplus of SEK 12.4 billion, while the EU trade resulted in a deficit of SEK 15.1 billion.

Seasonally adjusted, the net trade deficit amounted to SEK 0.4 billion in October 2016, compared with a deficit of SEK 0.5 billion in September 2016. The corresponding figure for August 2016 was a deficit of SEK 0.6 billion.

During January–October, the value of exports has decreased by 1 percent compared with the corresponding period one year ago, while the value of imports increased by 1 percent. Exports amounted to SEK 970.5 billion and imports were valued at SEK 977.1 billion, resulting in a deficit net trade balance of 6.6 billion for January–October 2016. The corresponding surplus figure for these months one year earlier was SEK 15.0 billion.




Thursday October 27 2016
Sweden Holds Key Rate at -0.5%
Riksbank | Joana Taborda | joana.taborda@tradingeconomics.com

The central bank of Sweden left its benchmark repo rate unchanged at -0.5 percent on October 27th 2016 as widely expected, saying the upturn in the Swedish economy is continuing, but it will take longer for the inflation to reach the 2 percent target. The SEK 245 billion quantitative easing programme was left steady but the central bank added that it is prepared to extend the purchases of government bonds and that the probability of a rate cut increased.

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

In Sweden, the Riksbank's cuts to the repo rate and the purchases of government bonds have had a broad impact and have pushed many rates down. This has contributed to positive development in the Swedish economy with high GDP growth and falling unemployment. Inflation has been rising since 2014 and long-run inflation expectations are back around 2 per cent. However, in recent months inflation has slowed down, which illustrates the uncertainty over how quickly inflation will rise towards the target.

The Riksbank now assesses that it will take longer for inflation to reach 2 per cent. The upturn in inflation therefore needs continued strong support. The Executive Board assesses that the repo rate needs to be held at the current low level, −0.50 per cent, for six months longer than was assumed in September. The Board does not expect to begin slowly raising the rate again until early 2018. The repo-rate path now also reflects a greater probability that the rate could be cut further. In accordance with previous decision, purchases of nominal and real government bonds will continue so that these amount to SEK 245 billion at the end of 2016. Until further notice, maturities and coupon payments on the holdings in the government bond portfolio will be reinvested. Prior to the monetary policy meeting in December, the Executive Board is also prepared to extend the purchases of government bonds. As the current asset purchase programme will run for the remainder of the year, there is thus opportunity to await further information that can affect the decision to extend the purchases. Examples of such information include the outcomes for inflation in the near term and actions of other central banks.

There are several factors that create uncertainty in the inflation forecast. The Riksbank therefore still has a high level of preparedness to make monetary policy even more expansionary if the upward trend in inflation were to be threatened. This also applies between the ordinary monetary policy meetings. All of the measures that the Riksbank has described earlier can still be used.

Monetary policy needs to be expansionary to safeguard the role of the inflation target as nominal anchor for price-setting and wage formation. But the low interest rate levels also entail risks, such as increased household indebtedness. To achieve long-term sustainable development in the Swedish economy, these risks need to be managed via targeted measures within macroprudential policy, housing policy and fiscal policy.




Tuesday September 27 2016
Swedish Trade Gap Hits Record High in August
Statistics Sweden | Joana Ferreira | joana.ferreira@tradingeconomics.com

Swedish trade deficit increased sharply to SEK 10.3 billion in August 2016 compared to SEK 2.7 billion in the same month a year earlier. It was the biggest trade gap on record, as exports decreased by 2 percent while imports increased by 7 percent. Trade with countries outside the EU resulted in a surplus of SEK 4.5 billion, while EU trade resulted in a deficit of SEK 14.8 billion.

The value of exports in August 2016 amounted to SEK 87.4 billion, while imports were valued at SEK 97.7 billion. Compared to August 2015, exports decreased by 2 percent in value while imports increased by 7 percent in value.

Trade with countries outside the EU resulted in a surplus of SEK 4.5 billion, while EU trade resulted in a deficit of SEK 14.8 billion.

Seasonally adjusted, the net trade deficit amounted to SEK 3.4 billion in August 2016, compared to a deficit of SEK 2.5 billion in July 2016. The corresponding figure for June 2016 was a deficit of SEK 1.6 billion.

In the first eight months of 2016, the value of exports decreased by 2 percent compared to the corresponding period one year ago, while the value of imports increased by 1 percent. Exports amounted to SEK 758.9 billion and imports were valued at SEK 764.9 billion, resulting in a deficit net trade balance of 6.0 billion for January – August 2016. The corresponding surplus figure for these months the previous year was SEK 17.8 billion.


Wednesday September 14 2016
Swedish Q2 GDP Growth Revised Up to 0.5%
Statistics Sweden | Joana Ferreira | joana.ferreira@tradingeconomics.com

Sweden's gross domestic product was upwardly revised to growth of 0.5 percent in the second quarter of 2016 from the previous three month period, following a 0.4 percent expansion in the first quarter. Government expenditure and fixed investment were the main contributors to growth while household consumption was unchanged and net external demand contributed negatively.

On a seasonally adjusted basis, general government expenditure expanded 1.2 percent (+0.6 percent in Q1); fixed investment advanced 1.8 percent (+1.7 percent in Q1); and inventories added 0.2 percentage points to growth. 

Meanwhile, household consumption showed no growth (+0.7 percent in Q1); and net external demand contributed negatively, as exports contracted 0.4 percent (-0.6 percent in Q1) while imports grew 0.8 percent (+1 percent in Q1).

On the production side, output of goods and services increased 0.5 percent (+0.4 percent in Q1). Service-producing industries grew by 1.4 percent (+0.8 percent in Q1) while production of goods decreased by 1.3 percent (-0.1 percent in Q1). 

Employment measured as the total number of hours worked increased by 0.4 percent and the number of persons employed increased by 0.6 percent.

Compared to the second quarter of 2015, the GDP advanced 3.4 percent, slowing from a 4.2 percent expansion in the the previous three-month period while beating preliminary estimates of 3.1 percent growth.


Wednesday September 07 2016
Sweden Leaves Key Rate Steady at -0.5%
Riksbank | Joana Taborda | joana.taborda@tradingeconomics.com

The central bank of Sweden left its benchmark repo rate unchanged at -0.5 percent on September 7th 2016 as widely expected, saying the inflation is rising and the economy is developing strongly but there's still considerable uncertainty abroad. Policymakers added that will likely not start raising rates until the second half of next year.

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

The international recovery is proceeding at a moderate rate. Economic policy uncertainty continues to be high, among other reasons due to the result of the British referendum. Economic signals following the referendum result have not been clear-cut and it is still too early to draw any clear conclusions regarding the effects.

Supported by the expansionary monetary policy, the Swedish economy has strengthened rapidly and activity is expected to continue to be strong over the next few years. CPIF inflation has shown a rising trend since 2014 and is now just below 1.5 per cent. The situation on the labour market has continued to improve and unemployment is falling. These developments will continue to have an effect on inflation with some time lag. Conditions are thus good for a continued rise in inflation.

The prospects for economic activity and inflation in Sweden remain largely unchanged since the monetary policy meeting in July and now, like then, the assessment is that a continued expansionary monetary policy is needed to maintain the rising trend in inflation.

Not until the second half of 2017 does the Executive Board consider it to be appropriate to begin slowly increasing the repo rate, when inflation is expected to be close to 2 per cent. In accordance with previous decisions, purchases of nominal and real government bonds will continue so that these amount to SEK 245 billion at the end of 2016. Until further notice, maturities and coupon payments on the holdings in the government bond portfolio will be reinvested.

There are several factors that create uncertainty in the inflation forecast. These include international developments, among others the effects of the result of the British referendum and weaknesses in the European banking system. Another factor is the development of the krona. The Executive Board therefore remains, as before, highly prepared to make monetary policy even more expansionary if necessary, even between the ordinary monetary policy meetings. Monetary policy needs to be expansionary to safeguard the role of the inflation target as nominal anchor for price-setting and wage formation. But the low interest rate levels also entail risks, such as increased household indebtedness. To achieve long-term sustainable development in the Swedish economy, these risks need to be managed via targeted measures within macroprudential policy, housing policy and fiscal policy.


Monday August 29 2016
Sweden Trade Surplus Widens in July
Statistics Sweden | Yekaterina Guchshina | yekaterina@tradingeconomics.com

Sweden recorded at SEK 0.5 billion trade surplus in July of 2016 compared with a SEK 0.4 billion surplus a year earlier. Exports and imports declined by 4 percent. Trade with EU countries resulted in a deficit of SEK 9.0 billion while outside the EU resulted in a surplus of SEK 9.5 billion

The value of exports in July 2016 amounted to SEK 85.1 billion, while imports were valued at SEK 84.6 billion. 

Trade with countries outside the EU resulted in a surplus of SEK 9.5 billion, while the EU trade resulted in a deficit of SEK 9.0 billion.

Seasonally adjusted, the net trade deficit amounted to SEK 0.8 billion in July 2016, compared to SEK 0.6 billion gap in June 2016. The corresponding figure for May 2016 was SEK 0.4 billion shortfall.

In the first seven months of 2016, the value of exports has decreased by 2 percent compared to the corresponding period one year ago, while the value of imports remained unchanged. Exports amounted to SEK 670.5 billion and imports were valued at SEK 666.0 billion, resulting in a surplus net trade balance of 4.5 billion for January–July 2016. The surplus figure for the corresponding months last year was SEK 20.5 billion


Friday July 29 2016
Sweden GDP Growth at 3-Year Low of 0.3% in Q2
Statistics Sweden | Joana Taborda | joana.taborda@tradingeconomics.com

The Swedish economy expanded 0.3 percent on quarter in the three months to June of 2016, following a downwardly revised 0.4 percent growth in the previous period and much lower than market expectations of a 0.7 percent expansion. It is the worst performance since a contraction in the second quarter of 2013 as investment stalled and exports fell, preliminary estimates showed.

Household consumption rose 0.4 percent, general government consumption increased by 0.6 percent and inventories added 0.2 percentage points to growth. 

In contrast, gross fixed capital formation was stagnant, exports shrank 0.3 percent while imports increased 0.3 percent. 

On a yearly basis, the economy expanded 3.1 percent, slowing from a 4.2 percent increase in the first quarter of the year and well below a 3.7 percent growth markets were expecting.


Wednesday July 27 2016
Swedish Trade Surplus Narrows by 71% YoY in June
Statistics Sweden |Mojdeh Kazemi | mojdeh@tradingeconomics.com

Sweden recorded at SEK 1.8 billion trade surplus in June of 2016 compared with a SEK 6.3 billion surplus a year earlier. Exports went down 4 percent and imports fell at slower rate of 0.3 percent. Trade with EU countries resulted in a deficit of SEK 13.6 billion while outside the EU resulted in a surplus of SEK 11.5 billion. It was the first trade gap since November 2015.

The value of exports in June 2016 amounted to SEK 104.6 billion, while imports were valued at SEK 102.8 billion. 

Trade with countries outside the EU resulted in a surplus of SEK 13.5 billion, while the EU trade resulted in a deficit of SEK 11.7 billion.

Seasonally adjusted, the net trade surplus amounted to SEK 0.7 billion in June 2016, compared to SEK 0.3 billion in May 2015. The corresponding figure for April 2016 was SEK 0 billion.

In the first five months of 2016, the value of exports has decreased by 2 percent compared to the corresponding period one year ago, while the value of imports increased by 1 percent. Exports amounted to SEK 586.2 billion, and imports were valued at SEK 579.6 billion, resulting in a surplus net trade balance of 6.6 billion for January–June 2016. The corresponding surplus figure for these months one year earlier was SEK 20.1 billion.


Wednesday July 06 2016
Sweden Holds Repo Rate at -0.5%, Lowers Rate Path
Central Bank of Sweden | Joana Ferreira | joana.ferreira@tradingeconomics.com

Sweden's central bank left its benchmark repo rate unchanged at -0.50 percent on July 6th and said there will be a longer delay until the repo rate begins to be raised. Although economic activity is strengthening, policymakers noted that uncertainty over economic developments abroad has increased as a consequence of the result of the British referendum on the EU. The bank also said it was ready to make monetary policy more expansionary if the inflation prospects deteriorate.

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

The forecast for GDP developments abroad, and particularly for the United Kingdom, has been revised down as a result of the increased uncertainty arising from the UK voting to withdraw from the EU. The Riksbank's assessment remains that global economic activity will continue to strengthen, but at a slower rate than was previously forecast. 

Supported by the highly expansionary monetary policy in recent years, economic activity in Sweden has strengthened rapidly and inflation has shown a rising trend. Although the forecast for GDP growth going forward has been revised down due to weaker international developments and increased uncertainty, economic activity is expected to continue improving. This creates the conditions for inflation to continue rising.

At present, it is difficult to assess the political and economic consequences of the outcome of the UK referendum, but the Riksbank assumes so far that the effects on the Swedish economy will be relatively limited. There is a risk of larger negative effects, but these are at present difficult to quantify in a forecast. The Riksbank is following developments closely and its forecasts will be adjusted as more information becomes available.

A highly expansionary monetary policy is needed to provide continued support to the Swedish economy and rising inflation. The Executive Board has therefore decided to hold the repo rate unchanged at  0.5 per cent. Given the increased uncertainty, the Executive Board now assesses that it will take longer before the repo rate begins to be raised. Slow increases in the repo rate are not expected to begin until the second half of 2017. The purchases of government bonds will continue during the second half of 2016, as de-cided in April. The Riksbank will also continue to reinvest maturities and coupons from the government bond portfolio until further notice.

The Executive Board remains highly prepared to make monetary policy even more expansionary, if necessary, even between the ordinary monetary policy meetings. There is still scope to cut the repo rate further. If necessary, the Riksbank could also adopt measures in the framework for the implementation of monetary policy to support monetary policy. In addition, the asset purchases could be extended. The Riksbank is still prepared to intervene on the foreign exchange market if the krona appreciates so quickly as to threaten the upturn in inflation. The Executive Board has therefore also taken a decision to extend the mandate that facilitates a rapid intervention on the foreign exchange market.

The repo rate needs to be low to safeguard the role of the inflation target as nominal anchor for price-setting and wage formation. But the low interest rate levels also entail risks, such as rising house prices and increasing household indebtedness. A long-term sustainable development of the Swedish economy needs targeted measures to manage these risks within macroprudential policy, housing policy and fiscal policy.