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TRADE

Sweden sees first quarter trade surplus shrivel

Sweden's trade surplus for the first three months of 2010 was 25.3 percent lower than the same period last year, according to new figures from Statistics Sweden.

The surplus came to 17.4 billion kronor ($2.4 billion) for the first three months of the year, compared to 23.3 billion a year earlier.

“During the first quarter 2010, the value of exports increased by four percent while imports increased by seven percent in value compared to the corresponding period one year ago,” the agency said.

Exports for the first three months of the year amounted to 261.1 billion kronor, while imports stood at 243.7 billion, it added.

For the month of March, Sweden’s trade surplus came to 7.2 billion kronor, down from 7.8 billion a year earlier, with exports rising nine percent to 99.4 billion kronor and imports growing 10 percent to 92.2 billion, the statistics agency said.

Since the beginning of the year, Sweden has seen its trade deficit with the European Union widen. In March it posted a shortfall of 5.4 billion kronor, compared to 4.5 billion for the same month last year.

The country meanwhile saw its trade surplus with countries outside the union grow 2.4 percent year-on-year to 12.6 billion kronor last month.

Corrected for seasonality, Sweden’s March trade surplus stood at 5.9 billion kronor, up from 5.7 billion a month earlier, Statistics Sweden said.

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TRADE

Sweden warns of sharper than expected economic slowdown

Sweden's government has worsened its economic outlook, bracing the country for slowing growth and rising unemployment.

Sweden warns of sharper than expected economic slowdown
Finance Minister Magdalena Andersson said trade tensions were slowing growth. Photo: Anders Wiklund/TT
In its latest prognosis, the country's finance ministry expects the country's economy to grow by 1.1 percent in 2020, down from the 1.4 percent it predicted in last September's budget. 
 
“We expect growth in Sweden to start slowing,” Finance Minister Magdalena Andersson said as she released the new figures. 
 
“There is a fairly broad consensus on the reason: This is due to trade wars and growing barriers for business, which has generated uncertainty over trade in the future, leading to reduced investment.” 
 
She said that the lacklustre economic growth in Germany had been a particular problem for Swedish exporters. 
 
According to the new prognosis, unemployment will hit 7 percent this year and next year, compared to the 6.4 percent predicted in September. 
 
But Andersson said that Sweden's healthy government finance, the result of years of budget surpluses, put it in a strong position to weather the downturn. 
 
“We can meet this slowdown without any significant cuts,” she said. “We have the lowest government debt since 1977 and compared to other EU countries were are extremely low.” 
 
She described the country's finances as a 'welfare reserve' which would allow the government to keep services running and provide fiscal economic stimulus in bad times.
 
She also said that the government planned this year to channel more money to Sweden's cash-strapped municipalities in through a special spring budget, recognising that growing unemployment is likely to drag on local budgets. 
 
The government could release emergency financing to the municipalities even earlier, she said. 
 
“It's obvious that requirements are greater now and will be greater in future.” 
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