THE Swedish economy contracted more than expected in the second quarter as exports from the Nordic country fell, official statistics showed today.

Sweden’s economy shrank by 1.5% in the April-to-June period compared to the same quarter last year, according to Statistics Sweden’s preliminary data.

Analysts had expected a drop of 0.5%, according to Bloomberg.

There are several reasons for the decrease “but one factor in the last month of the quarter was a decline in exports of goods”, Mattias Kain Wyatt, economist at Statistics Sweden, said in a statement.

In June, GDP was 3.6% lower than a year earlier.

Compared to the second quarter of 2022, GDP fell by 2.4% between April and June this year.

The top Nordic economy avoided a technical recession when it expanded 0.6% in first quarter, following a 0.2% contraction in the fourth quarter of 2022.

The final GDP figure for the second quarter is set to be published on August 29.

Sweden’s central bank, the Riksbank, has raised its key interest rate several times as the country combats persistent inflation.

It reached the highest level in nearly 15 years when the Riksbank announced an increase of 0.25 percentage points to 3.75% at the end of June.

The annual inflation rate slowed in June but remained elevated, with consumer prices rising 9.3%.

For 2023 as a whole, the central bank expects the Swedish economy to contract 0.5%, with unadjusted inflation of 8.9%. – AFP, July 28, 2023.