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Swedish krona rallies after stronger than expected economic growth.
Sweden's economy increased 6.9 percent in the third quarter after recording a revised 4.5 percent growth in the second quarter, the statistics office said Monday.
The record expansion -- the fastest since 1971 -- were much stronger than expected, making the krona swell to a one-month high versus the euro.
GDP rose 2.1 percent quarter-on-quarter versus expectations for 1.20 percent, with the year-on-year increase rising to 6.9 percent against forecasts of 5.25 percent, according to a Reuters poll.
Exports, which makes up more than half of the Scandinavian country's GDP, increased 11.9 percent and imports 14 percent. Industrial production increased by 9.3 percent.
"These were strong figures across the board. The Swedish economy is growing on a broad front and is really steaming ahead," Knut Hallberg, economist at Swedbank, told Reuters, adding that the data strengthened the case for further monetary tightening.
Sweden's central bank raised its benchmark interest rate by 0.25 points to 1.0 percent last month, the third increase since July as the country's economy makes a strong recovery from recession.
Last week the OECD said that Sweden's economic growth is expected to continue.
"The economy has recovered strongly from the recent recession. Solid, though more moderate, growth is expected to continue as external demand gains momentum. Unemployment is projected to decline, but rather slowly. Core inflation is expected to remain subdued, amid low wage pressures and still ample spare capacity”, the organization said in a analysis.
Data showed Monday that household consumption expenditures increased 3.5 percent, while general government consumption expenditures rose by 1.8 percent. The changes in inventories amounted to a positive GDP change of 2.9 percentage points.
Sweden’s export-driven economy will expand 4.8 percent this year and 3.7 percent in 2011, the Finance Ministry said last month. In contrast to most of Europe, the Swedish government has been able to stimulate growth through spending hikes and tax cuts.
Last Updated (Monday, 29 November 2010 18:15)