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ECONOMY

Sweden defies recession forecasts as economy sees surprise upturn

Despite still fighting high inflation and interest rates, the Swedish economy grew more than expected in the first quarter of the year.

Published: 30 May 2023 11:46 CEST
Sweden defies recession forecasts as economy sees surprise upturn
Sweden narrowly avoided a recession in the first quarter of 2023. Photo: Fredrik Sandberg/TT

The top Nordic economy expanded by 0.6 percent in the first three months of the year, avoiding a technical recession following a 0.2 percent contraction in the fourth quarter of 2022.

“The upturn is mainly explained by an increase in inventories and by a strong growth in the export of goods,” Statistics Sweden said in a statement.

Analysts were on average expecting 0.1 percent growth, according to Bloomberg.

A preliminary estimate published by Statistics Sweden at the end of April had put growth at 0.2 percent.

Year-on-year, GDP grew by 0.8 percent in the first quarter of 2022, compared to the 0.3 percent preliminary figure.

The upturn comes despite the central bank’s rate-hike campaign against inflation, which is still hovering around 10 percent.

According to its April forecast, the central bank expects the Swedish economy to contract 0.7 percent for 2023 as a whole.

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PROPERTY

Swedish property market on steady upward climb

Is the Swedish property market coming back to life after a long period of hibernation? Recent figures suggest as much.

Published: 2 May 2024 11:52 CEST
Swedish property market on steady upward climb

Swedish property prices rose for the fourth consecutive month in April – 5.8 percent since the turn of the year and 1.7 percent compared to the previous month, according to state-owned mortgage bank SBAB.

The price of a detached home rose 1.9 percent in April compared to March, and apartments rose by 1.2 percent.

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It’s not unusual for the property market to perk up in spring, but there’s a clear increase even adjusting for seasonal effects. 

“Summed up since the turn of the year, apartment prices have risen by over 7 percent. Even the estimated trend shows a clear increase, in other words prices are rising more than you would expect given the time of the year,” said SBAB chief economist Robert Boije in a statement.

A major reason behind the price increase is the expectation that Sweden’s central bank, the Riksbank, has stopped raising the country’s main interest rate and the hope that it might even cut the rate in its next announcement, which will come next week.

While this is expected to bump up the price of buying a property, it is on the other hand also likely to lead to lower mortgage rates.

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