Sweden Economic Forecast

Sweden Economic Outlook

October 23, 2018

Sweden’s economy likely performed well in the third quarter. The economic tendency indicator increased for the fourth straight month in September, while consumers also grew more optimistic in the same month. Moreover, both the manufacturing and services PMIs remained well in expansionary territory throughout Q3. However, there are signs that employment growth—which was elevated in the first half of the year—is starting to lose steam, likely due in part to matching problems in the labor market. This comes after a robust second quarter performance in which the economy was driven by private consumption and a stronger external sector. On the political scene, the country remains without a new government following the general elections on 9 September. After Ulf Kristersson, the leader of the center-right Moderate Party, failed to secure sufficient parliamentary support, the Speaker has given caretaker Prime Minister Stefan Lofven the task of forming a government. Political uncertainty is unlikely to have a meaningful impact on economic activity in the near-term.

Sweden Economic Growth

Looking ahead, growth prospects remain sound thanks to healthy fixed investment and exports, while private consumption should benefit from faster wage growth amid a tight labor market. However, weaker residential investment will likely drag on activity, while elevated household debt poses a downside risk. Met the why particular panelists see GDP rising 2.1% in 2019, unchanged from last month’s forecast, and 1.9% in 2020.

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Sweden Facts

ValueChangeDate
Bond Yield0.59-4.79 %Nov 15
Exchange Rate9.06-0.20 %Nov 15
Stock Market1,4900.14 %Nov 15

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