Swedish exports back in the black

Exports of goods from Sweden increased by 7.6 percent by volume in the first quarter, in comparison with the first quarter of 2009 with imports climbing 8.2 percent, new figures from Statistics Sweden (SCB) show.

“This is the first time since the third quarter of 2008 that foreign trade volumes have increased,” SCB wrote in statement on Wednesday.

Exports rose by 4.8 percent in current prices, with imports up by 8.2 percent during the first quarter. The number of working days was equal to the corresponding period of 2009.

Despite the positive gains trade remained well below pre-finance crunch levels.

“But despite the upturn export volumes during the first quarter of 2010 remained at around 10 and 15 percent under the levels of the first quarters of 2007 and 2008, respectively,” SCB wrote.

Heavier products lay behind the volume increases with wood and paper up 9 percent, mineral products by 29 percent after strong upturns for steel and iron ore, chemicals by 5 percent, and energy by 11 percent on the back of a 14 percent hike for petroleum products.

However downturns were seen in wood and pulp products, in pharmaceuticals which dropped 4 percent, and machinery products which fell 3 percent.

A 6 percent climb was noted within machinery and transport equipment, with road vehicles up 17 percent after upturns for passenger cars and spare parts, while electronics and telecommunication products, including IT products, increased by 11 percent.

Within the other commodities sector, food and textiles, shoes and clothing increased at the same rate as total exports while the sector as a whole increased by 3 percent.

The quarter showed a sharp increase in car imports, following quarterly falls dating back to the fourth quarter 2008. Despite the upturn, import volume remained at approximately 10 percent under the levels for the first quarters of 2007 and 2008.

Machinery and transport equipment was the dominating import sector, up 16 percent with imports of road vehicles 39 percent higher, with passenger cars climbed 64 percent. Electronics and telecommunications products increased by 23 percent, while the import of machinery decreased by 1 percent.

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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.”