Unexpected Contraction in Swedish GDP for Q1 2023
Sweden's GDP unexpectedly shrinks by 0.2% in Q1 2023, driven by declines in investments and weak household consumption.
Key Points
- • Swedish GDP decreased by 0.2% in Q1 2023.
- • Fixed gross investments fell by 3.8%, particularly in construction.
- • Exports rose by 1.8%, while imports increased by 0.3%.
- • Annual growth rate for Sweden now stands at 0.9%, below expectations.
Sweden's economy faced an unexpected contraction in the first quarter of 2023, with Gross Domestic Product (GDP) decreasing by 0.2% compared to the previous quarter. This downturn was primarily influenced by a significant decline in fixed gross investments, which dropped by 3.8%. The fall in investments was mainly attributed to decreased expenditure in construction and building facilities. In contrast, Sweden's exports showed resilience, rising by 1.8%, while imports saw a slight increase of 0.3%.
Analysts had anticipated a modest GDP growth of 0.1%, making the reported contraction of 0.2% surprising. The annual growth rate for Sweden now sits at 0.9%, falling short of the expected 1.7%, reflecting a weaker economic outlook. Notably, household consumption also dipped by 0.2%, while public consumption managed a slight rise of 0.1%. Jessica Engdahl, head of National Accounts at Statistics Sweden (SCB), highlighted that while various GDP components experienced minor shifts, the pronounced downturn in fixed gross investments was a crucial factor overshadowing stronger export performance. Furthermore, the impact of inventory investments on the GDP was deemed negligible, indicating that the decline may not be remedied by typical seasonal adjustments or business stockpiling practices.
Overall, these figures underscore a significant economic challenge for Sweden as it navigates through the complexities of both domestic and international economic pressures.
The unexpected nature of this decline raises questions about the future trajectory of the Swedish economy, particularly as global uncertainties persist, compelling policymakers to reassess their strategies in response to this recent data.