Stockholm: Sweden’s economy is fighting off the worst effects of the slowdown in the Eurozone, data showed on Thursday, easing worries ahead of second-quarter growth figures due next week.
Strong public finances, a resilient export sector and reasonably healthy labour market have protected Sweden from the full effects of Europe’s problems, although growth has slowed sharply.
Data on Thursday — including consumer confidence, unemployment and trade — was mixed, but gave little reason to expect a marked worsening in the Nordic economy.
“There are no signs of any greater slowdown in these statistics,” said Martin Enlund, economist at Handelsbanken.
“These statistics increase the likelihood of a unchanged repo rate also in September. In that case, we will have an interest rate of 1.50 per cent in Sweden while we have zero rates in Europe.”
The Swedish crown, which has rallied in the past couple of months, strengthened further on the news, to 8.4280 to the euro after the releases from 8.4697 just before.
Data on Thursday showed consumer confidence rose unexpectedly in July to 5.6 points from 3.1 points in May, the National Institute of Economic Research said. Analysts in a Reuters poll had forecast a drop to 2.5 points.
The statistics office said separately that Sweden’s unemployment rate increased to 8.8 per cent in June from 8.1 per cent in May, but it came in lower than the 8.9 per cent forecast in a Reuters poll of analysts.
“The labour market continues to hold up pretty well,” SEB economist Olle Holmgren said.
Sweden has fended off the worst effects of Europe’s debt crisis and has been seen as a safe-haven by investors even though growth is expected to be meagre at best this year after a 3.9 per cent expansion in 2011.
GDP data for the second quarter are due on July 30.
The centre-right government has rejected calls for big measures to stimulate the economy despite the deepening shadow from the Eurozone, while the central bank has taken a cautious approach to monetary policy.
Earlier this month, the Riksbank kept its key interest rate on hold at 1.50 per cent, but signalled it might ease policy later this year if the debt turmoil in Europe intensified.
Other data on Thursday showed producer prices rose 0.2 per cent on the month in June and the trade surplus narrowed to 9.3 billion crowns ($1.3 billion) from 9.6 billion.
“Exports surprised with an increase which means that the second quarter, in terms of net exports, ended strong. This indicates a positive growth in GDP on Monday,” Swedbank economist Knut Hallberg said.
“If we add all this (data on Thursday) up, it is clearly (positive) as well as a sign of resilience, with interest rates rising a bit and the crown strengthening some on this.”
The statistics office also said household lending grew 4.5 per cent year-on-year in June, a slight slowdown from growth of 4.6 per cent in the previous month.
