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'Biggest GDP drop in Swedish history'

TT/David Landes · 29 May 2009, 09:49

Published: 29 May 2009 09:49 GMT+02:00

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“This is the largest drop in Swedish economic history, but in line with expectation,” Henrik Mitelman, head analyst with SEB Merchant Banking, told the TT news agency.

In its March forecast, Sweden’s National Institute of Economic Research (Konjunkturinstitutet – KI) projected the economy would shrink by about 6 percent during the first quarter of this year.

But the fresh numbers from Statistics Sweden (SCB) indicate that Sweden’s economy is far from healthy.

While first quarter GDP fell by 6.5 percent compared with 2008, industrial production was down 9.0 percent, with the manufacturing sector suffering a 24.3 percent drop in production.

Gross fixed capital formation was also down by 14.3 percent, and overall employment, measured by hours worked, fell by 1.5 percent.

“But what’s interesting is that productivity has also collapsed. We’re working 1.5 percent less than last year and producing 6.5 percent fewer goods and services. That’s not an especially good development,” said Mitelman.

Trade figures also reflected the effects of the continued economic slowdown in Sweden and the rest of the world with exports falling by 16.2 percent, while imports were down by 14.8 percent.

One potentially bright are figures showing that, compared with the fourth quarter of 2008, the Swedish economy only shrunk by 0.9 percent, taking into account seasonal adjustments.

Story continues below…

The decline is substantially less than the 5.0 percent drop which occurred between the third and fourth quarters of 2008.

“That indicates that the fall in GDP is starting to slow down, and that we are possibly on our way towards a stabilization,” said the head of KI, Mats Dillén, to TT.

TT/David Landes (news@thelocal.se)

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Your comments about this article

11:47 May 29, 2009 by Nutcracker
This is part of an EU-wide pattern; only 2 days ago, Germany announced the fourth consecutive GDP drop, marking the worst in its history and it's the same picture with manufacturing and exports EU-wide. There is just too much regulation from the EU, over 80% of legislation originates from Brussels, irrespective of individual nations' needs and structures..
15:36 May 29, 2009 by karex
However, the body in Brussels is comprised of representatives from all the member nations...

This is not just an EU thing. The situation is bleak world-wide. We're all in the same boat.
19:22 May 29, 2009 by Mikael Ekman
Brussels... That is in Belgium, a country which would have been at least as badly off as Iceland if it weren't for the Euro. Same goes for a couple of other countries. Sweden is not in the Euro zone but luckily (I guess) we already had our disaster in the economy in the 90s so were better prepared this time.

Still though, thank gooddness we can hide behind the EU as our exports collapse!
02:28 May 30, 2009 by Kooritze
Better prepared this time yes.......but this is not going to be like other times for sure. A country like a person can live off savings but it will eventually be depleted and this little country will feel it, like everyone else.

A drop of 6.5% in a quarter is phenomenal and is sure to drop further.

To see where we are,check out: www.chrismartenson.com
14:00 June 1, 2009 by drvsrs
The Socio Economic Development (SED)indicators like GDP plunge down, because the government and private corporate units function with a profit motive, without any linkage with the national linkage. This attitude should be changed by evaluating the productivity and management decisions on quantum and financial ratios then with reference to the SED indicators. I have Geometrically established that the following guidelines related to the area of investment savings, manpower and technology

1. Domestic investments should be through domestic savings. 2. Domestic human potential should man the domestic technology. Synchronise these & optimise their dimensions.

See at http://www.drvsrs.com/concepts.htm and in the book

"SED BY DRVSRS" at http://drvsrs.com/store/page1.html#9
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