Danske Bank analysis team suggests that for the Swedish economy, even though the two latest GDP prints exceeded consensus expectations, they would still argue that underlying growth has been weak.
“The reason is that the releases were boosted by net exports, which have counterbalanced the weak domestic demand. There is a clear risk that consumer spending and investments will remain weak throughout the year and thus we maintain our call for sub-trend Swedish growth during 2019.”
“The inflation outlook remains a challenge, which probably will force the Riksbank to postpone planned rate hikes. Moreover, as international central banks soften, the scope for the Riksbank to keep its relatively upbeat rhetoric is shrinking by the day.”
“We do not expect any major policy revisions at the July meeting. If anything, there might be a dovish shift with regard to market communication.”
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