Disappointing data

The National Institute of Economic Research’s Economic Tendency Indicator, which summarises how consumers and firms view the economy, fell from 102.3 in July to 100.0 in August. This was the lowest level since October 2013 (99.9) and clearly under the 102.3 that analysts had forecast.

The decrease was mainly due to weaker sentiment in the manufacturing industry, with the indicator falling from 102.9 in July to 97.7 in August. There was a decline in export orders, especially in the electronics and automotive industries.

Torbjörn Isaksson, chief analyst at Nordea, noted in a letter to customers that the figures indicated that GDP growth in Sweden is now slowing down markedly, and forecast moderate GDP growth of 2.5 per cent. He also noted that this would make it harder to achieve the 2 per cent inflation target.

There was disappointing data from Business Sweden as well on Thursday, with the Export Managers’ Index falling from 58.8 in the second quarter to 53.9 in the third quarter.

EU dashes hopes of rapid growth

The European Commission has lowered its growth forecast for the eurozone and the broader European Union. Gross domestic product is expected to land at 1.6% in 2016 and 1.8% next year, while growth in the region as a whole is expected to hit 1.8% this year and 1.9% in 2017.

Sweden will continue to fare well, the Commission said, upwardly revising its growth forecast for the Scandinavian country, from 3.2 to 3.4%. The budget deficit is expected to be 0.4% of GDP.

“Sweden is not in as deep a recession as the rest of Europe; unemployment is quite high but Sweden has the highest employment rate. This provides a good tax base and strong finances,” Swedbank chief economist Anna Breman has said.