Swedish Economy Grows by 0.4% Amid Industrial Decline
Swedish economy grows by 0.4% in April 2025 despite industrial order decline.
Key Points
- • Swedish economy grew by 0.4% in April 2025 compared to March.
- • Increased household consumption and business production drove growth.
- • Industrial orders fell by 6.3% in April, raising future growth concerns.
- • Potential Riksbank interest rate cut forecasted following the economic data.
Recent preliminary data from Statistics Sweden (SCB) indicates that the Swedish economy experienced a growth of 0.4% in April 2025 compared to March, slightly surpassing analysts' expectations of 0.3%. The primary drivers of this growth were increased household consumption and heightened production in the business sector. Year-on-year, the economy showed a growth of 1.2% in April when adjusted for calendar effects. However, the industrial sector faced serious challenges, as new orders fell by 6.3% in April compared to the previous month, raising concerns about the sustainability of future growth.
Torbjörn Isaksson, chief analyst at Nordea, cautioned about the optimistic view on these GDP figures, stating that the decline in industrial orders adds uncertainty to the overall economic outlook. Meanwhile, Amanda Sundström of SEB suggested that such economic indicators may prompt the Riksbank to consider a reduction in its key interest rate next week, forecasting a possible cut of 0.25 percentage points to 2.00%. "While the economy is moving in the right direction, the pace is slower than desired," she remarked.
Analysts widely see the recent growth alongside the industrial downturn as a complex interplay between consumer demand and manufacturing performance, crucial for shaping Sweden's economic policy in the near term.
As the country moves forward, the contrasting trends within various sectors highlight both the resilience and vulnerabilities in Sweden's economic landscape. The anticipation of interest rate modifications by the Riksbank will be closely monitored, as it could signal broader shifts in economic policy and market responses.