Væksten i Sverige dykkede kraftigt i andet kvartal med over 8 pct., men det er dog mindre end i eurozonen, hvor der var en minusvækst på mellem 10 og 14 pct. Eksporten faldt kraftigere end forbruget – henholdsvis med 12 og 8 pct. Væksten blev formentlig mindre i Norge og Danmark end i Sverige, mener Nordea, som ikke tør vurdere, om Sveriges specielle coronapolitik har haft betydning for det relativt svagere fald i væksten.
Sweden Macro Review: GDP downhill
As feared, the Swedish economy contracted in an unprecedented way in Q2
Statistics Sweden’s flash shows that GDP dropped by a full 8.6% q/q and 8.2% y/y in Q2. The outcome was in line with our call and the Riksbank’s view.
There are few details. Statistics Sweden says in the press release that “…compared with the first quarter of 2020, the decline in GDP is mainly driven by falling exports and household consumption”.
Monthly data underlines that the downturn is broad based. Household consumption probably declined by some 8% y/y in Q2, while exports of goods were down 12% y/y. We don’t have any indicators for exports of services, but they probably declined even more. Fixed investment fell too, although some construction investment may have held up relatively well, we think. Inventories most likely weighed on growth.
Statistics Sweden’s monthly GDP indicator for April and May showed a downturn by 7.4% and 9.6% y/y, respectively. The indicator for June is published tomorrow. The Q2 numbers imply a drop by almost 9% y/y for June, thus somewhat less bad than in May.
Monthly production numbers were also out this morning. They too indicate that a recovery started in June, albeit only gradually. Production in the total business sector rose by 0.7% m/m, mainly driven by the manufacturing industry. We expect that the recovery will gear up in the coming months.
It is difficult to estimate the strength of the recovery at this point, but the Riksbank’s forecast for FY 2020 at -4.5% seems reasonable (implying quarterly growth rates of around 3% for Q3 and Q4).
Swedish GDP contracted much less in the first half of the year than for instance in the euro area, while some of our Nordic neighbours (Denmark and Norway) probably fared better than Sweden. It is too early to evaluate how different strategies to deal with COVID-19 have effected the economies.
The figures don’t change much for the monetary policy outlook. The Riksbank is still in a crisis mode. When the economy normalises, focus will shift to the too low inflation expectations. We see the Riksbank on hold, but a rate cut can’t be ruled out completely.
Nordea’s Economic Outlook is due out on 2 September.
Sweden Macro: Light at the end of the tunnel