Sweden's economy bounces in January despite rate rises

TT/AFP/The Local
TT/AFP/The Local - [email protected] • 9 Mar, 2023 Updated Thu 9 Mar 2023 09:13 CEST
Sweden's economy bounces in January despite rate rises
A container ship loads cargo at Värtahamnen im Stockholm. Photo: Fredrik Sandberg/TT

Sweden's economy grew by an unexpectedly high two percent in January, freeing up the Riksbank to take bolder actions to combat inflation.


According to preliminary data released on Thursday by Statistics Sweden, Sweden's Gross Domestic Product (GDP) rose by two percent compared to December last year.


"Activity in the Swedish economy rebounded in January with growth in goods, exports and household consumption in parallel with growing production among public authorities," Neda Shahbazi, national economist at Statistics Sweden, said in a press release.

The agency found that household consumption had risen by 0.5 percent in January, driven by a resurgence in spending on restaurants, cafes, hotels and other overnight accommodation.

Exports grew by 22 percent in January compared to last January, while imports grew by 13 percent over the same period. 

"These are strong numbers," Nordea's chief economic analyst Torbjörn Isaksson told the TT newswire. "This could assuage the Riksbank's fears about future growth and as a result create a certain tendency to hike rates." 

Olle Holmgren at SEB agreed, although he stressed that the relationship between growth rates and inflation was relatively weak looked at on a monthly basis. 

"But these are pretty surprising numbers and are significantly stronger than expected," he told TT. "It could affect how the Riksbank reasons in April a little if they think the economy looks a little more resilient."

The consensus among economists is for the Riksbank will increase its base interest rate by 0.5 percentage points at its next meeting in April. 

Other numbers released by Statistics Sweden on Thursday showed that industrial production grew by 3.5 percent in January, while the supply of services grew by 1 percent.


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