Growing export swells the economy for the fourth straight quarter – making the country "a top performer in the EU family".

• Economic recovery taking hold in Sweden
• Sweden's unemployment rate jumps to 9.8%

Sweden's GDP increased by 3 percent in the first quarter compared to the first quarter of 2009 and by 1.4 percent compared to the fourth quarter of 2009.

The economic upswing was considerably stronger than expected. Economists had forecast an 0.9 increase compared to the last quarter of 2009, according to a poll.

"All-in-all, these figures show that Sweden stands out as a top performer in the EU family", Swedish bank Handelsbanken said in a comment.

The figures also increased expectations that the Riksbank will hike interest rates in July from record low 0.25 percent – for the first time since the financial crisis.

Last year the country’s economy dropped 5.1 percent – its worst contraction in 70 years. The Scandinavian country was hard-hit by the global economic crisis but its economy quickly bounced back, returning to growth in the second quarter of 2009.

“Sweden is in a good position from a fiscal point of view so it doesn’t need to tighten fiscal policy in the way that other countries need to do, so the outlook for consumer spending is fairly bright,” Nicola Mai, economist at JPMorgan Chase & Co told Bloomberg before the release. “After the sharp fall in exports during the recession there is room for strong growth ahead.”

Exports -- that accounts for half of the country's GDP -- increased by 4.2 percent during the quarter while imports increased by 4.4 percent, Statistics Sweden said.

Household consumption expenditures increased by 3.1 percent and general government consumption expenditures by 0.5 percent

The OECD said Wednesday that Sweden's gross domestic product is expected to increase 1.6 percent this year and 3.2 percent next year on improving export demand and private consumption.

Due to the country's comparatively stable banking sector and low exposure to Greece and other troubled economies more and more investors eye Sweden as a safe harbor.

“When the Baltic countries’ economies collapsed, investors fled Sweden because of its banks’ investments there. Today, they’re flocking to the Nordic country as a refuge from debt-ridden southern Europe”, Bloomberg wrote in an analysis last week .

Sweden is likely to have the smallest budget deficit in the EU this and next year, according to EU forecasts.