Swedish Economic Growth Cools in First Quarter

Swedish Economic Growth Slows in Q1 2024

STOCKHOLM (Reuters) -Sweden's gross domestic product was unchanged in the first quarter of the year compared with the previous three-month period, preliminary figures from the Statistics Office showed on Tuesday.

Against the same quarter a year earlier, GDP expanded 1.1%.

Analysts had forecast growth of 0.2% compared to the final three months of 2024 and 1.7% against the year earlier period.

The slowdown had been anticipated after a strong final quarter of 2024 when the economy grew 0.8% quarter-on-quarter and 2.4% year-on-year.

Swedish Finance Minister Elisabeth Svantesson said earlier this month that a recovery that began late last year had stalled as a result of global trade tensions that have roiled markets.

Deteriorating growth prospects have put rate cuts back on the table in Sweden with the central bank set to announce its next policy decision on May 8.

However, the Riksbank may not be in a rush to act.

Swedish GDP bounced back in March after two poor months, growing 0.6% from February, figures from the Statistics Office showed.

Retail sales, trade and household lending figures for March were also reasonable.

"If growth would deteriorate going forward, then the Riksbank could consider lowering rates," Nordea economist Torbjorn Isaksson said.

"The Swedish economy is relatively strong. Moreover, inflation is too high, suggesting that the Riksbank will stay on hold for a good while yet."

(Reporting by Simon Johnson, editing by Stine Jacobsen and Shri Navaratnam)