(Bloomberg) — Sweden’s economy grew somewhat in February as the Nordic region’s largest economy is proving its resilience to high borrowing costs.
Gross domestic product expanded by 0.1% from the previous month, according to an initial estimate published Wednesday by Statistics Sweden. That was a stronger outcome than expected by economists polled by Bloomberg, who had estimated an 0.2% contraction.
Coming on the heels of a 1.1% expansion in January, the data could indicate that the first three months of this year will mark a return to growth following three consecutive quarters of contraction.
While Sweden’s central bank is preparing to cut its benchmark interest rate from a 15-year high of 4% in either May or June, it bank has cautioned that strengthening demand could delay easing moves if it threatens to fuel continued price increases.
Read More: Riksbank Chief Calls for Cautious Easing to Avoid Demand Surge
The expansion in February was explained by, among other factors, growth in service industries, according to Mattias Kain Wyatt, an economist at the statistics agency. “At the same time, economic activity was weighed down by weaker figures for goods producers and general government production,” he said.
Household consumption data for February, also released Wednesday, showed that spending remained subdued, declining 0.5% from the previous month and standing 0.3% lower than in the same month of 2023. Swedish households have been under pressure over the past two years, with their capacity to spend buffeted by faster inflation and higher borrowing costs.
–With assistance from Joel Rinneby.
©2024 Bloomberg L.P.
