Sweden’s economy dived 6.2 percent
Sweden's economy plunged during the second quarter although "things are not as bad as feared".
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Sweden’s gross domestic product, GDP, contracted 6.2 percent during the second quarter compared to the same period last year, working-day adjusted, the statistics office said on Friday.
Still, the fall was lower than expected in a Reuters poll – forecasting a fall of 6.6 percent – and the krona gained against the euro to its highest level in eight months on Friday morning.
"The GDP supports very positive sentiment for the Swedish currency at the moment, that things are not as bad as feared," said Niels Christensen, a strategist at Nordea, to Reuters. "It (the krona) is still undervalued so there is room for more correction."
During the first quarter the economy fell 6.5 percent, the sharpest dive since the quarterly measurements began 15 years ago. The figures for the second quarter indicates that the economy is heading in a brighter direction as the fall is slowing down.
"A lot points towards the view that we now have reached bottom and that it's only going to get better and better", Swedbank Knut Hallberg said to Reuters.
Economists said the relative slowing of negative growth could indicate that better numbers were on the way later this year.
"Details bode well for the third quarter," Martin Enlund, an economist at Handelsbanken Stockholm, was quoted as saying by Dow Jones Newswires.
Economists at SEB bank commented that it was "most likely GDP will increase slightly going forward."
Household consumption spending decreased by 2.2 percent, while general government consumption expenditures was down 0.5 percent.
Total producers of goods decreased by 16 percent while export and import fell 18 and 19 percent. The service sector industries contracted by 3.8 percent.
Total employment, measured as the number of hours worked, decreased by 4 percent while the numbered of employed decreased by 2.2 percent.
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Last Updated (Friday, 31 July 2009 14:36)
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