On an annual basis, Sweden’s gross domestic product (GDP) increased by 0.7 percent in the third quarter of 2024, surpassing expectations from Bloomberg analysts who had forecasted a growth of 0.3 percent. This growth, although modest, reflects the country’s economic resilience amidst various global challenges.
Jessica Engdahl, the section chief of National Accounts at Statistics Sweden (SCB), noted that Sweden’s GDP continued to show a slightly weaker performance compared to historical averages. The components of the supply balance experienced minimal movements, with external trade in goods acting as a drag on growth. However, a positive shift in inventory investments helped to keep the overall growth above zero.
The buildup of industrial inventories played a significant role in lifting GDP growth by 0.6 percentage points. Additionally, public consumption increased by 0.4 percent, while household consumption remained nearly unchanged. SCB attributed the fluctuation in household consumption to increased spending on food and non-alcoholic beverages, offset by reduced expenditures on restaurants and lodging services.
Moreover, fixed gross investments rose by 0.3 percent, indicating a degree of confidence in the economy. However, the net export position deteriorated by 0.5 percentage points, as imports outpaced exports. This imbalance was driven by a 1.7 percent increase in imports, overshadowing the 0.6 percent growth in exports.
Despite the overall positive trends, the number of employed individuals in the economy decreased by 0.2 percent, highlighting ongoing challenges in the labor market. This decline may have implications for consumer spending and overall economic activity in the coming quarters.
Looking at the quarterly data for Sweden in the third quarter of 2024, we see that the GDP growth rate was 0.3 percent, outperforming the consensus forecast of -0.1 percent. This positive surprise indicates a certain level of resilience in the Swedish economy, despite external headwinds. On a year-on-year basis, the GDP growth rate stood at 0.7 percent, slightly higher than the expected 0.3 percent. This steady growth trajectory reflects the country’s ability to navigate through uncertain times and maintain a stable economic performance.
In conclusion, Sweden’s economic outlook remains cautiously optimistic, with various indicators pointing towards a gradual recovery. The positive contribution from inventory investments, coupled with resilient consumer spending and fixed investments, bodes well for the country’s economic prospects. However, challenges such as declining employment levels and a widening trade deficit require close monitoring to ensure sustainable growth in the future. As Sweden continues to navigate through a complex global economic landscape, policymakers and businesses alike must remain vigilant and adaptable to seize opportunities and mitigate risks in the ever-evolving market environment.