Swedish economy fails to meet growth forecast

Swedish economy fails to meet growth forecast
Sweden's second-quarter seasonally adjusted economic growth was far weaker than expected, with expansion at just 0.7 percent instead of 1.4 percent as previously forecast, official data showed on Friday.

“These figures feel much more appropriate,” Annika Winsth, head economist with the Nordea bank, told the TT news agency.

“It’s a major revision, but expected.”

According to Winsth, earlier forecasts published by Sweden’s official statistics agency, Statistics Sweden (SCB), were overly optimistic in light of evidence showing a slowdown in the manufacturing sector.

The national statistics institute said the downward revision mainly reflected a fall in exports of services, public consumption as well as the contribution of inventories to growth.

According to Nordea’s forecasts, Sweden’s economy will likely grow 1.2 percent for 2012 as a whole, although there is a chance that growth may end up even lower. The bank expects zero growth for the third quarter.

“We are somewhere close to bottom in terms of Swedish economic growth,” said Winth.

Following the announcement from SCB, the krona fell slightly against both the euro and the dollar.

TT/AFP/The Local

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