Sweden enters recession with GDP shrinking 0.3 percent in the third quarter

STOCKHOLM, Nov. 29 (Xinhua) -- The Swedish economy is in recession after a contraction in the third quarter (Q3), according to official statistics released on Wednesday.

The gross domestic product (GDP) decreased by 0.3 percent in the third quarter compared to the previous quarter and by 1.4 percent compared to the third quarter of 2022, Statistics Sweden states.

"GDP decreased for the second quarter in a row," says Jessica Engdahl, head of section at Statistics Norway's national accounts department, in a press release.

The reduction in the second quarter was 0.8 percent from the first quarter and 1 percent on an annual basis, according to revised figures from Statistics Sweden in August.

The decline in the third quarter was mainly driven by inventory changes, particularly reduced industrial inventories and reduced household consumption.

"Household consumption expenditures were negative for the fifth quarter in a row," Engdahl said.

According to figures released by the Economic Institute (KI) on Wednesday, households continue to have a gloomy view of the economic future with the consumer confidence indicator for November at 72.8.

Although it had climbed 2.2 points from October, it was still far from the 100 baseline, and NIER said in a press release that it was "very low by historical standards."

"The confidence indicator for the retail trade fell by 2.9 points to 88.0 and shows much weaker sentiment than normal. The decrease was a result of negative signals about sales in recent months," writes the Norwegian Economic Institute in the press release.

Overall, the Economic Institute's barometer fell in November from 84.9 to 84.6.

The contraction of the Swedish economy comes in the wake of inflation, which in October was at 6.5 percent on an annual basis, according to Statistics Norway.

Borrowing costs have also soared, with the current policy rate of 4 percent the highest since 2008.

Before the Swedish central bank started raising the policy rate in May 2022, it had been at or below zero for over seven years.


https://nord.news/2023/11/29/sweden-enters-recession-with-gdp-shrinking-0-3-percent-in-the-third-quarter/?feed_id=57035

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