Swedish economic growth - impressive - 2.3 percent in the second quarter

Monday, 30 July 2012
Sweden's gross domestic product (GDP) grew by 2.3 percent in the second quarter versus the same period last year. Compared to the first quarter of this year, GDP grew by 1.4 percent, according to official data from Statistics Sweden (SCB).

Economists had expected GDP growth of 0.8 percent year on year, according to Reuters. Between the first and second quarter, economists had expected a growth of 0.3 percent.

Household consumption expenditure grew by 0.8 percent in the second quarter, writes SCB. Housing costs rose, while expenditure on transport fell. The latter is mainly due to reduced purchases of new and used cars, and reduced operating costs for cars.
Government expenditure rose by 2.7 percent and the county council by 1.7 percent.

Exports gave the largest contribution to GDP growth, according to SCB. It increased by 1.7 percent during the quarter. Imports decreased by 0.2 percent.

The number of employed increased by 0.4 percent while the number of hours worked was unchanged, implying a reduction in average hours worked. The seasonally adjusted and compared to the first quarter of 2012, the number of hours worked in the economy by 0.2 percent, according to SCB.

"What drives this growth are stock figures," says Olle Holmgren, economist at SEB.
This implies a risk that there could be downward revisions in the future, when more inventory statistics are received by SCB, according to Holmgren.

The unexpectedly high Swedish GDP figure will in any case be difficult for the Swedish central bank, the Riksbank to not raise its GDP forecast and hence it becomes difficult to justify a repo rate cut in September, SEB had previously expected.

Even if the figures are adjusted lower, it would still be a positive growth and it means Sweden continues to know how to navigate the choppy waters of the Europe zone troubled economic environment. This challenges analysts who had thought that the Swedish economy was veering off course.
by Scancomark.se Team

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