Sweden’s GDP decreased by 0.7 percent in April, seasonally adjusted and compared to the previous month.
Sweden’s economy is shrinking
It’s sad news. Sweden is lagging behind the other countries in the EU at the same time as job opportunities are becoming fewer and bankruptcies are increasing.
One should not stare blindly at the GDP reports month by month. The important tools for understanding how Sweden is doing come quarterly.
But it is still difficult to be happy about Statistics Norway’s latest preliminary compilation of the GDP indicator.
Avanza’s private economist Felicia Schön. Photo: Avanza. Consumption is the culprit
It says Felicia Schoen who is a private economist at Avanza, in an interview with News24.
– It doesn’t seem to be going so well for the Swedish economy right now. Among other things, preliminary GDP figures for April show that Sweden’s economy is shrinking. One explanation is said to be a decline in household consumption, says Felicia Schön.
But with high interest rates and high inflation in the past year, many households are still licking their wounds financially.
The recession lingers
That consumption is low is not unexpected after a protracted recession, she believes.
– Therefore, I think it is natural that households are still cautious and more thoughtful in what the money is spent on. However, this type of decline can have such a simple explanation as the weather – a late spring can affect consumption more than you think, says Felicia Schön.
A positive effect
But even if the economy declines, the individual households do not necessarily become poorer.
– At the same time as household consumption seems to be decreasing, we see incredibly large inflows into fund savings. New data from the Association of Fund Companies shows a net inflow of almost SEK 39 billion in the month of May, and Swedes’ fund wealth is a record high.
The crisis may have led to at least one positive effect, and that is that Swedish households learned to save for the future.
– Perhaps it is the case that in the wake of the inflation crisis, the Swedes prioritize building up safe savings over spending the money. Let’s hope it results in a balance between the two, concludes Felicia Schön.
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