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Sweden's GDP growth at post-war low

Published: 01 Mar 2010 10:18 GMT+01:00
Updated: 01 Mar 2010 10:18 GMT+01:00

Sweden's GDP declined by 1.5 percent in the fourth quarter, making 2009 the worst year for growth since World War Two, according to a new report from Statistics Sweden (SCB).

Sweden's GDP fell by 4.9 percent for the full year 2009 in comparison with 2008.

The development in the fourth quarter was significantly below expectations with a Reuters survey of analysts forecasting a drop of only 0.1 percent in the period.

Household consumption increased by 1.8 percent, while general government consumption expenditure climbed by 2.1 percent.

"A weak figure. But I do not think that it changes the picture in any dramatic way. It is primarily inventories and investments that have been surprisingly negative," said Henrik Mitelman at SEB Merchant Banking.

Mitelman forecast that the tide would turn for Swedish GDP in the first or second quarter 2010.

Both exports and imports decreased by 5.7 percent while industrial production decreased by 2.3 percent. Total goods production decreased by 6 percent and service sector industries by 0.1 percent, the SCB statistics show.

Total employment, measured as the number of hours worked, decreased by 2,4 percent while the numbers of employed decreased by 2.1 percent.

Stefan Hörnell at Handelsbanken also expressed surprise over the report.

"The figures are weaker than we had expected, especially private consumption," he said.

Hörnell added that the figures could impact Riksbanken's base interest rate policy.

"It's becoming likely that the interest rate rise will happen later than July, that it perhaps will happen in the autumn instead."

TT/Peter Vinthagen Simpson (news@thelocal.se)

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Your comments about this article

11:32 March 1, 2010 by hpunlimited
Time for the Swedes to wake up. Go out there and start companies, look for jobs. Way to many just wants to sit on their lazy asses and wait for the goverments "silver spoon" to be put in their mouth. Governments do not create jobs, people do.
11:48 March 1, 2010 by skatty
Countries, where have been in World War Two use the end of the war as a start point for economy recovery; I don't get why Sweden use this start point, it has never been in WWII!
11:51 March 1, 2010 by byke
I thought WWII was good for sweden? they exported allot of steel back then.
17:35 March 1, 2010 by Blazing Saddles
Skatty, maybe because the entire world refers to the end of WWII as start of a global expansion never before seen. It is often called the "long boom" and it started in 1945 and ended in the 1970s.

Yes, Sweden was neutral during the war but your response is very weak sauce.
20:09 March 1, 2010 by skatty
@Blazing Saddles

"long boom" for the countries in war; Sweden has already been in boom during the war, and even got better after the war. May be the start point for Sweden should be considered the Napoleonic period! Or the early 90s with devaluation of SEK! But definitely not the WWII.
23:10 March 1, 2010 by Blazing Saddles
I wonder how they calculated GDP back in the Napoleonic period? Skatty, you got any stats?
23:29 March 1, 2010 by EP
Sweden ... start selling some iron ore to the Germans again ... that will help
00:52 March 2, 2010 by Luke35711
double dip recession, after all?

and all this while SAAB, Volvo and AstraZeneca are still here... Interestingly, Poland hasn't even entered recession. Time for the Polish Model?
08:10 March 2, 2010 by skatty
@Blazing Saddles

No, but Napoleonic period was a downturn like early 90s, probably Swedes can start their calculation from early 90s.

You see, the point is that you have to get a memorable period in economy, a very terrible one or a very good one, and then start your consideration on improve or disprove from that point of view. Many countries can start from WWII, because it was a terrible downturn in economy and then long boom after it but not Sweden, the Swedish economy didn't considerably changed to a fatal improve or disprove!
08:12 March 2, 2010 by Nemesis
WW2 is a disingenious start date for any economic comparison. By the end of 44 Swedens exports to Finland and Germany had more or less stopped hitting the economy hard.

Sweden did not pick up again until after the Marshall plan got into full swing as countries with destroyed infrastructure and manufacturing, had to import specialist engineering, scientific and manufacturing equipment from Sweden that would normally have come from central european facilities that had been carpet bombed.

This is a really stupid article, with an obviously purely political intention. I assume we will see more of this inane nonsense coming up to the election.

Most of the western world is in a recession due to out of control banks, who still have not been legislated against. The derivative investment arms of those banks are still connected to them, ensuring it will be worse next time.

Remove the banks from the figures and it looks very different.
14:55 March 2, 2010 by Luke35711
@Nemesis

totally agree that continued risk-taking by the banks is still a huge problem. They still assume they are just too big to fail. If things go wrong the tax-payer will pick up the bill. If things work out they will gain, and take home nice fat bonuses.
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