Sweden headed for the biggest economic rebound in the EU.

• Sweden's economy grows faster than expected
• Sweden's economy a 'bright spot in Europe'

Eighty percent of Sweden’s biggest companies reported earnings that exceeded analysts’ estimates last quarter, according to a sum-up by Bloomberg. At the same time the country’s economy grew faster than expected.

The figures indicate the largest Nordic economy may be headed for the biggest economic rebound in the European Union.

The upbeat numbers are mainly explained by strong performance from the country’s exporting companies, generating more than half the country’s economic output.

“Exporters are recovering more rapidly from the latest plunge,” Nordea Bank AB economist Torbjörn Isaksson told the news bureau. “As the export sector was the hardest hit during the crisis, gross domestic product and capacity utilization are now rising sharply; the strong recovery in the Swedish economy continues.”

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

“The strong performance of Swedish companies is due to their exposure to strong export markets combined with strong cost controls and high margins,” Hans Peterson, global head of investment strategy at SEB Bank, told Bloomberg. “Sales are in many cases still at low levels compared with 2007 and therefore, stable growth going forward is a blessing for Swedish exporters, which make up a large part of the market.”

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. Exports increased by 14 percent and imports by 18 percent. The numbers are stronger than expected.

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.

Since the turn of the year the OMX Stockholm 30 index is up almost 13 percent, touching its highest point this year.

“Many foreigners like Sweden because of its cyclical exposure, but also because the krona is expected to get even stronger as the Riksbank so clearly has shown it will continue to raise the key rate, which is not the case in Euroland or the U.S.,” Martin Guri, an equity strategist at Nordea told Bloomberg. “If you as a foreigner buy Swedish shares, a good relative performance could come both from the stock index and the currency.”