The Swedish economy contracts in the second quarter. We need to lower rates
Sweden, like all of Europe, has an economic growth problem, and it shows. from GDP The Swedish economy contracted by 0.8% quarter on quarter in the three months to June 2024, following an expansion of 0.7% in the previous period, according to preliminary estimates, while forecasts had been for a expansion.
This is the first economic contraction since the second quarter of last year. According to a national economist at Statistics Sweden, the decline was attributed to the weak figures reported for the month of April.
Compared to the corresponding quarter of the previous year, GDP recorded no growth, following an increase of 0.7 percent in the first quarter. Here is the relevant graph:
Curiously, the Swedish statistical body, unlike its colleagues, does not give a detailed analysis of the components that led to the decline, but retail sales, which fell sharply in 2023, did not grow particularly in the first half of 2024, on the contrary they dropped in June, indicating that, even in Sweden, there is no recovery in household consumption.
Sweden's central bank began lowering its key rate in May, one of the first in the rich world since the pandemic. Easing is expected to resume at a faster pace in the second half, as officials indicated they could cut borrowing costs by up to 75 basis points before the end of the year. Inflation is at 2.6%, within the riskbank's expectations, so there is no reason why this shouldn't happen.
The Swedish Krona is devaluing slightly compared to the Euro, so it is probable that, in the second half of the year, the greater competitiveness of Nordic exports will also help the economic hope of the country which, certainly, is also feeling the effects of the industrial crisis German.
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The article Swedish economy contracts in second quarter. We need to lower rates comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/leconomia-svedese-si-contrae-nel-secondo-trimestre-bisogna-abbassare-i-tassi/ on Mon, 29 Jul 2024 09:00:49 +0000.