Sweden: Economy eclipses pre-pandemic size in Q2, according to advanced data
The economy expanded 0.9% in the second quarter of 2021 in seasonally-adjusted quarter-on-quarter terms, according to preliminary figures released by Statistics Sweden. The result was slightly above the 0.8% rise clocked in Q1 and came in above market expectations. In calendar-adjusted annual terms, GDP rose 10.0% from the corresponding quarter in 2020, marking an improvement from the 0.1% year-on-year drop recorded in Q1 and a rapid return to growth.
The quarterly acceleration came on the back of improving household consumption and surging business and consumer confidence, as well as strengthening demand dynamics both domestically and externally. Nevertheless, despite a brisk vaccination campaign, the uncertain nature of the ongoing pandemic amid outbreaks of new Covid-19 variants is a key risk heading towards year-end.
A more comprehensive breakdown of Q2 GDP will be released on 8 September.
Regarding the outlook, Knut Hallberg, Carl Nilsson and Glenn Nielsen, analysts at Swedbank, commented:
“We expect the economic momentum to continue as vaccinations proceed and restrictions are eased. Still, the recovery hinges on a positive virus development and any backlashes could weigh on optimism ahead, as could further supply-side problems for firms.”