Sweden’s GDP growth hits a wall

Sweden's GDP growth hits a wall
According to Statistics Sweden, the country's GDP's growth statistics for the year's first quarter are considerably lower than economists expected.

An inquiry carried out by Reuters had economists expecting an annual growth rate of 2.8 percent.

Annika Winsth, an analyst at Nordea, interprets the new GDP statistics as a sure sign of a flagging economy.

Speaking to the TT news agency, she explained that the low growth rate is due to many factors, including lower household consumption and exports.

“Only investments are on the up,” she said.

Winsth speculated that the weaker growth statistics will dampen the high rate of inflation and that as a result the Riksbank will not raise interest rates.

Minister of Finance Anders Borg didn’t want to comment on the unexpectedly low GDP stats.

Press spokesman Markus Sjöqvist told TT that Borg would make a statement in the next few days regarding the government’s stance on economic developments.

“We will be back shortly with a collective judgement,” he said.

In April this year the government’s spring budget predicted GDP growth to decrease by 2.1 percent in 2008 and 1.8 percent in 2009, and to increase considerably up to 2.9 percent in 2010.

Household consumption expenditures grew by 2.0 percent and public consumption fell by 1.1 percent. Exports grew by 5.4 percent while imports went up by 5.2 percent.

Statistics Sweden also adjusted the numbers for 2007 upwards by 0.1 percent.