Driven by strong consumption and investment, growth was 2.2 percent year on year, national number-crunching agency Statistics Sweden said in a statement.
The quarter on quarter growth figure surprised economists, who were expecting a much stronger 1.0 percent.
“Not our best forecasting day,” said Andreas Wallström, chief analyst at Nordea markets, on his Twitter account, adding it was due to “lower net exports and public consumption than expected”.
Swedish Q1 GDP on weak side at 0.4% q/q (Riksbank 0.8%, consensus 1.0%, Nordea 1.2%). Lower net exports & public consumption than expected pic.twitter.com/wnWGdzYGS4
— Andreas Wallström (@anwallstrom) May 30, 2017
Sweden's household consumption rose by 0.5 percent and property prices jumped by 7.7 percent.
Consumption of transport, furniture, hotel and restaurant services have been on the rise, said Statistics Sweden.
Sweden is a major exporter of transport equipment, machinery and iron. Overall export figures were down by 0.2 percent but goods exports were up by 1.7 percent.
Service exports fell by 4.3 percent, according to Statistics Sweden, which cited the decline in the activity of rental companies.
After an exceptional year in 2015 with a 4.1 percent expansion, Swedish growth slowed down to 3.2 percent in 2016. The central bank expects 2.8 percent growth this year.