2023.11.2907:07:00UTC+00Swedish Economy Contracts Further, Trade Balance Swings To Surplus

Sweden's economy contracted for the second straight quarter in the three months ending September, revised from a flat change estimated initially, the latest date from Statistics Sweden showed on Wednesday.

Separate official data showed that the trade balance of the country swung to a surplus from a deficit in the previous year amid a surge in exports.

Gross domestic product fell 0.3 percent sequentially in the third quarter, following a 0.8 percent decline in the sector quarter. In the flash report, the change for the September quarter was flat.

Withis, the country has now entered into a technological recession in the third quarter.

The downturn in the third quarter was mainly explained by a decrease in inventories and reduced household consumption, the agency said.

On the expenditure side, household consumption dropped 0.6 percent over the quarter, linked to reduced expenditure for most purposes.

Changes in inventories also contributed negatively by 1.4 percent, mainly due to decreased industrial inventories.

Gross fixed capital formation slid 0.6 percent, while general government consumption was unchanged. Exports showed an increase of 1.4 percent, while imports dropped by 1.5 percent.

On a yearly basis, the economy shrank 1.4 percent in the third quarter, following a 0.4 percent decrease in the preceding three-month period.

Another piece of data from the statistical office showed that the trade balance turned to a surplus of SEK 8.9 billion in October from a deficit of SEK 10.7 billion last year, as exports posted sharp growth of 10.0 percent amid a 1.0 percent drop in imports.

In October, retail sales fell at a slower rate of 1.0 percent annually versus a 3.8 percent fall a month ago. Sales have been falling since May last year.

Sales of durable goods dropped 2.8 percent annually in October, while those of consumables, excluding sales at the state-owned chain of liquor stores, increased 1.8 percent.

On a monthly basis, retail sales declined 1.4 percent in October, reversing a 1.4 percent fall in September.