Swedish economy – resilient so farData until February suggest a more than decent start of the year. In February, following an improvement in January, household consumption rose by an additional 2% over the month. Spending on housing contributed the most, while spending on restaurants & hotels continue to weigh on consumption.
Private sector production increased by 0.9 percent over the month in February. Manufacturing production remains strong, but delivery issues might dampen the activity in the sector going forward. Industrial orders indicate, however, continued growth. The recovery in the service sector is, as expected, slower. Overall, the monthly GDP figure indicates continued growth in February.
The indicators suggest that the economy grew in the first quarter. This contrasts our latest forecast of a decline in Q1. However, lagging vaccinations and worries on a 3rd corona wave is expected to weigh on the near-term outlook. This puts downside risks to our forecast of a strong recovery in Q2 but given the resilience the overall economy has shown so far, we judge that our forecast of GDP growth at 3% for this year remains relatively well in play.
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