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RECESSION

Nordea: Swedish economy cooling off

For the first time in four years, economic growth in Sweden has fallen below three percent.

Published: 21 January 2008 11:28 CET

According to a recent report by the bank Nordea, Sweden’s gross national product grew at 2.7 percent in 2007. The bank projects growth of 2.1 percent in 2008 and 2.0 percent in 2009.

Unemployment stood at 6.2 percent in 2007 and is expected to hover around 5.7 percent in 2008 and 2009.

Sweden’s inflation rate, as measured by the consumer price index, came in at 2.2 percent for 2007, and is expected to swing up to 3.2 percent in 2008 before dropping back to 2.2 percent in 2009.

Nordea also forecasts that the Riksbank will refrain from any further interest rate hikes.

According to the report, slower global growth led by a U.S. economy headed toward recession is the main driver for lower growth forecasts in Sweden.

“But we believe that Sweden will avoid a recession on account of our active financial policies,” said Nordea’s head economist Jörgen Appelgren.

He believes the Riksbank won’t raise interest rates in 2008 and that labour market conditions will improve in the next quarter before leveling off for the rest of the year.

Sven-Arne Svensson, head economist at securities firm Erik Penser Fondkommission has a more positive outlook for Swedish economic growth in the coming years.

“We forecast a growth rate of 2.6 percent this year and 3.0 percent next year. We believe that private consumption will remain strong,” he said.

ECONOMY

Spain’s inflation soars to 29-year high

Spanish inflation accelerated in November to its highest level in nearly three decades on the back of rising food and gas prices, official data showed Monday.

Published: 29 November 2021 13:10 CET
black friday spain
Black Friday sales can't disguise the fact for shoppers that life in Spain is getting increasingly expensive. Photo: GABRIEL BOUYS / AFP

Consumer prices jumped by 5.6 percent, up from a 5.4 percent increase in October, according to preliminary figures from national statistics institute.

That is its fastest pace since September 1992, when the rate was 5.8 percent.

The surge in inflation in the eurozone’s fourth-largest economy was due largely to a spike in food prices, followed by higher gas prices, the statistics office said.

Electricity costs, however, declined slightly after a month-long acceleration, it added.

As in other European Union nations, inflation in Spain has risen since the start of the year after consumer prices declined during most of 2020 due to the economic impact of pandemic lockdowns.

In October, eurozone inflation reached 4.1 percent, well above the European Central Bank’s target of two percent and equal to a high set in July 2008.

But the bank believes eurozone inflation will peak in November and is set to gradually slow next year as supply bottlenecks and the energy crunch ease, board member Isabel Schnabel said earlier this month.

Investors worry central banks will withdraw their stimulus measures sooner than expected to tame inflation.

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