Sweden: Recovery view intact despite weak data – Nordea

Nordea’s Chief Analyst Torbjörn Isaksson highlights that Swedish GDP and production fell in January, driven by sharp declines in construction and manufacturing, while household consumption and services still grew. He attributes part of the weakness to temporary factors and maintains a view of a healthy recovery, expecting the Riksbank to stay cautious and wait-and-see at its upcoming meeting.

Weak January data but recovery expected

"SCB’s monthly GDP indicator was also out this morning. GDP fell by 1.1% m/m and was up by a mere 0.6% y/y in January. The downturn is due to the drop in construction and manufacturing industry as well as decreasing government consumption according to SCB’s press release."

"All in all, today’s data were weaker than expected. However, key domestic sectors as household consumption and private services show growth and there are probably some temporary factors at play, weighing on growth."

"Most soft indicators suggest continued good growth and we keep our view that of a healthy recovery in the Swedish economy. As for the Riksbank, the uncertainty related to the war in the Middle East means that the bank will take a wait-and-see stance at the monetary policy meeting next week."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)