Sweden's GDP increased by 3.7 percent in the second quarter.

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Sweden's GDP increased by 3.7 percent in the second quarter in working-day adjusted figures when compared to the second quarter of 2009, the statistics office said Friday. Exports increased by 14 percent and imports by 18 percent.

The numbers are stronger than expected. The country’s Riksbank expected the economy to increase by 3.2 percent.

Sweden recently raised its key interest rate from a historic low 0.25 percent to 0.50 percent, reporting a strong economic recovery in the country which along with several Nordic neighbours appears to be leading Europe out of crisis.

A number of Swedish heavyweight companies has also posted impressive earnings, underlining strength of corporate recovery.

The the biggest supplier of ball bearings, a vital component of machinery everywhere, SKF of Sweden which also makes sealants, reported a big increase in profits in the second quarter. Demand for trucks is a leading indicator of activity in every sector of the economy, and two of the main European truck makers, Scania and Volvo trucks in Sweden, have reported unexpectedly strong second-quarter results.

Finance Minister Anders Borg said this month that “Sweden's economy is strong and appears as an obvious spot of light in Europe where many countries are facing large problems” and hiked the outlook for the economy. The minister expects GDP to increase 3 percent this year and 3.8 percent next year.

Household consumption expenditures increased by 2.6 percent, while general government consumption expenditures increased by 1.4 percent. Industrial production increased by 5.2 percent. Total producers of goods increased by 9.8 percent and service sector industries by 2.8 percen.

"The strong GDP figure was pretty expected," Olle Holmgren, macroanalyst at SEB, told TT. "There was great uncertainty about how strong it would be. We see broad growth. The investments are attractive and the strong increase in exports are at levels not seen since 1994."

Swedbank forecast GDP to increase by 2.9 percent while SEB expected an upswing of 3.4 percent. Nordea said it expected GDP to increase by 4 percent.