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'Record growth' for Sweden's economy

'Record growth' for Sweden's economy

Published: 01 Mar 2011 10:49 GMT+01:00
Updated: 01 Mar 2011 14:42 GMT+01:00

Sweden's economy easily beat expectations to post record growth in the fourth quarter while 2010 as a whole turned out to be the strongest year since 1970, the national statistics agency said Tuesday.

Sweden's economy grew 1.2 percent in the fourth quarter of 2010 compared to the previous three-month period and jumped 7.3 percent year-on-year, beating analyst expectations, according to numbers from Statistics Sweden.

The 7.3-percent year-on-year quarterly jump is the highest on record since the statistics agency started recording quarterly data in 1970.

For the whole year, "GDP (gross domestic product) increased 5.5 percent compared with 2009, which is the highest increase since 1970," the agency said in a statement.

Sweden's GDP growth slowed compared to the third quarter, when it reached 2.1 percent, but still outstripped analyst forecasts polled by Dow Jones Newswires for a 0.9-percent quarter-on-quarter gain.

Compared to the same quarter a year earlier, growth sped up to 7.3 percent from 6.9 percent in the third quarter, easily beating analyst expectations that growth would remain a 6.9 percent in the last three months of the year.

Compared to the previous quarter, growth in the October-December period was boosted by household consumption, which was up 4.3 percent, and by investments, which were up 4.5 percent, the statistics agency said.

Sweden, which emerged from recession in the second quarter of 2009 and saw growth quickly pick up in the first quarter of 2010 -- largely thanks to a rebound in exports -- now has one of Europe's strongest growth rates.

"The Swedish economy is growing across the board. The recovery is continuing with positive signals from the labour market. This means the central bank will continue to raise its (interest) rates," Nordea Bank analyst Annika Winsth told news agency TT.

Sweden's central bank last month hiked its key interest rate for the fifth time since July, a widely anticipated move, bringing it to 1.5 percent.

The bank explained the hike was due to continued growth in the Swedish economy and that it expected its key rate to reach 2.5 percent in 2012, up from the 2.2 percent previously expected.

The head economist of mortgage lender SBAB said Tuesday's figures confirmed the Riksbank had taken the right monetary policy line.

"The Swedish economy is booming!" Tomas Pousette told TT.

Finance Minister Anders Borg, who has referred to the country's economy as a "Tiger," shared analysts' enthusiasm but said challenges lay ahead.

"There is a substantial challenge ahead of us to manage both strong growth and low unemployment without creating imbalances," he told TT, saying growth of 5.5 percent in 2010 had beaten the government's expectations.

Sweden's unemployment rate, however, rose more than expected in January to 8.2 percent from 7.4 percent in December, but is following a downward trend annually.

In a report published in January, the Organisation for Economic Co-operation and Development (OECD) also said Sweden's economy would continue to show strong growth this year and in 2012 after emerging relatively unscathed from the global slump.

The OECD put Swedish growth at 3.9 percent this year and 3.4 percent in 2012.

TT/AFP/The Local (news@thelocal.se)

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Your comments about this article

11:39 March 1, 2011 by Nemesis
If that is really the case, which I doubt, then were are the jobs that level of growth would have created?
11:54 March 1, 2011 by Great Scott
"now has one of Europe's strongest growth rates".

Also has one of Europe's unemployment rates.

Just does not add up, someone is telling porky's.
12:08 March 1, 2011 by Mib
Sweden did suffer a very large drop in GDP the previous year if I remeber correctly, so the gain brings them back to about level. Unemployment usually takes longer to reflect a growing economy...so hopefully these figures translate into real jobs.

Add in the factor that the Koronor is much stronger against other currencies and the growth rate looks even better. At least it's positive news.
12:12 March 1, 2011 by Swedesmith
There are similar articles appearing in the press here in the US. "The economy is improving, disposable income is up, the stock market is up!"

Tell that to all the people without jobs.
12:24 March 1, 2011 by Rick Methven
@Nemesis

"If that is really the case, which I doubt, then were are the jobs that level of growth would have created?"

Why should you doubt it, is it that you think we economists are morons?

If you look at the aftermath of every economic downturn, companies that survive firstly try to get increased productivity from the workforce that they have rather than employ more workers and secondly they replace human workers with technology. This means that for a period when the overall economy is climbing back to pre-crisis levels, they are not taking on any new workers.

The unemployment level only decreases when companies feel confident that the economy as a whole is stable again and they want to increase output. I would suggest that there will be no significant reduction in the level of unemployment for 2 to 3 years more. And that will only happen as long as there is general stability in the world markets, which at the moment does not look very likely.
13:22 March 1, 2011 by Mib
"....is it that you think we economists are morons?"

If ever there was a question begging for an answer that they don't want to hear, then the above is in the top 10 of not to ask. Maybe, when economists are paid based on the accuracy of their predictions will we get more considered views, instead of the "herd of sheep" mentality....and remember, I didn't say all economists, but I would a sizeable number, especially the ones we see in the media.

However, your explanation regarding the lag in unemployment decreasing is true.

Once the recovery is truly on its way, I expect Governments around the globe to prosecute board members and others of bailed out financial institutions, auditors who mislead investors with their sign-offs of their company's accounts, corrupt real estate agents, corrupt politicians etc. I won't hold my breath!
13:36 March 1, 2011 by Rick Methven
@Mib

my quote about morons was a reference to the statement that Nemesis made on another thread

quote

"As for economists. Those are the morons who created neo-liberalism which has destroyed entire sections of our societies and communities"

Just another one of her sweeping statements with no foundation.
14:13 March 1, 2011 by eppie
Well macro economists are a kind of conservative historians.

They keep following the same mantra untill something goes wrong.

The cause of the financial crisis of a few years ago was that spending and consuming even if you don't have the money are good for the economy, just like population growth is good for the economy.

This all works fine if resources are available and if things like environment and ethics are not taken into account.

Now what the world needs is an economy based on limiting the wasting of resources (meaning that overconsumption should decrease), this does not fit with the current ideas about economy......also because there is a lot at stake.

I am sure that in 50 years a guy that designs a new model (in say 2020) which is later adapted by everybody that takes this into account wil get the nobel prize....but the sad thing is that someone could have figured that out in 1990 as well.
15:03 March 1, 2011 by apelsin000
Nice! go on!
15:39 March 1, 2011 by Kina_observer
What a growth rate! Swedes really do a very good job!
17:02 March 1, 2011 by 2394040
Over the short term, this sounds very good. But over the long term, with overpopulation, a select few who basically "confiscate" most of the world's wealth, jobs being eliminated, wages falling, prices rising, etc., this is a formula for economic disaster. In 1980, I started on a new job for $8 an hour; considered good for its place and time. Earlier this year, after a couple of years of retirement, I started on a new job for $8.75 an hour. And this is the normal starting wage for service-type work after a period of 30 years! Obviously, this is not good over the long term. The tragedy is that most people have been fooled by the lies of the leadership for many, many years.
18:38 March 1, 2011 by Mib
@2394040 - With more immigration, illegal workers and higher unemployment.....the unskilled jobs that many people can do without too much training will keep salaries low. Hence why you keep on hearing the mantra to go to university, get a degree, specialise in law, medicine etc etc and you will achieve a better chance of maintaining full employment in your life, higher salary and the flexibility to move to countries where your skills are in demand.

Of course, there is more than one way to earn your money, especially in America, where it appears if you have the determination etc, you have a better chance of achieving your goals than in some other countries. However, lots of the younger generation are being brainwashed into thinking that they can take their clothes off, or go on to Pop Idol and hey presto, you will be famous and successful. Very few achieve such success.

The biggest problem is the people at the very top earning huge amounts of money, but not actually achieving anything other than the ability to move money at the right time to make a profit. The likes of Bill Gates, Warren Buffett etc are the real heroes as they have earnt their wealth and are committing large amounts of their billions to charitable causes.

The whole political system in the US, and Europe etc is corrupt. US politicians being funded by large corporations to of course influence in their favour. The EU has not ad its accounts signed off for over 10 yrs, UK MPs ...even very rich ones, scrounging every last penny they can get out of the expenses........while they seem to have nlimited budgets while the real world have to ive within austerity measures. Nothing will change until the masses force a change of attitude......just as they have done in Africa and the Middle East. The difference is...most people are comfortable with their live and as long as they have a LCD TV, iPhone etc, then they can't be bothered ad ignore the real truth.
19:14 March 1, 2011 by Njal
This growth won't last, it never does. The world bank will see to that.
11:46 March 2, 2011 by Marc the Texan
I think this is impressive growth and jobs will follow. US and Europe will do much better in the coming years. China and India are losing price competitiveness in many areas as well as greater exports from the West going toward China and other developing economies. I'm sure Swedish exports will boom like never before.
12:20 March 2, 2011 by Keith #5083
#Marc the Texan

I totally agree provided that the eternal pessimists will stop exporting their pessimism!

Much talk about high unemployment here in Sweden, yet according to The Economist statistics, Sweden is below the average in the EU.
01:55 March 3, 2011 by cattie
There is a difference in the growth of national product (BNP) and the growth of jobs. Much of Swedish ecomomic growth is the finance areas and with Swedish international corporations with growth in internationational markets. For example, If TELE2 is doing well in Eastern Europe, that does not mean they are hiring loads of Swedes.
13:51 March 3, 2011 by Keith #5083
With the increasing computerisation and globalisation it surprises me that people still talk about 'jobs' in an industrialised era context.

The time has long passed when one should look to someone else for providing employment. If you want a job, create one yourself and in the process create your own business.

If you don't think you have the skills, then why should an employer think you have?

If you don't think you have the skills, invest your time in training or learning them yourself.

Just out of interest, in how many scenarios are workers working overtime as opposed to allowing for more employees to be employed?
08:45 March 4, 2011 by marcelj
This does sound like the usa press where they exclaim how the economy is growing and in the same paper they show tent city and the long food lines. Then they defer to the jobless recovery, so what is it? Its no recovery at all. The usa is in failure thanks to clinton and the bush crooks. the usa is a lie. Liars are running things in the usa along with the criminal banking organization. Do not listen to anything that comes out of washington. Its all lies.
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