Crown lift by approximately five penny against both the euro and the dollar since the Statistics sweden (SCB) reported unexpectedly strong GDP numbers for last year’s fourth quarter. Swedish market interest rates climb at the same time marginally upwards.
annual rate in the fourth quarter, from a growth rate of 1.5 per cent in the third quarter. The increase was much greater than expected. Analysts had on average expected a growth in the annual rate of 1.5 per cent in even the fourth quarter.
What surprises positively is that foreign trade is better than what most expected, partly due to higher service exports. Public consumption also pulls upward, while investment looks weaker than expected.
For the full year 2018, there was a growth of 2.3 per cent compared with the year before. For 2019, however, anticipate the most with a hefty slowdown, partly due to weaker investment in housing.
the national institute of economic Research (KI) and the Riksbank believe in the principle that there will be a half – to a growth of 1.2 per cent. Among other forecasters are, however, those who have a more positive outlook on the development.
GDP growth of 1.6 per cent in 2019 and given the current GDP outcomes, we see no reason to change the forecast, ” says SEB economist Lina Fransson.
She adds, however, that the probability that the SEB will have to lower the forecast is larger than that it will need to be increased. The risks of a weaker Swedish growth in GDP than assumed in particular in the export sector, which is dependent on the global economy. At home haunting at the same time, private consumption, which fell to the lowest level since 2013 in the third quarter of last year, at the same time as nier’s survey shows a weak trend in households.
“It seems that Swedish households starting to be careful about spending their money at the same time as the uncertain global economic conditions pose a threat to exports,” says Fransson.
When it comes to inflation, however, SEB’s economists a considerably weaker front than the Riksbank. It means that they expect that the next rate hike will not be until april 2020, while the Riksbank has flagged an increase to the autumn of 2019.
– There have also been some signs that inflation expectations have started to turn down, and we believe that this will be a cause for concern for the Riksbank during the autumn (2019), says Franssson.
She adds that on top of this I n a large round of wage negotiations in early 2020, that can make it for riksbanksdirektionen with Stefan Ingves in the tip.
“Exactly,” says Fransson.
She points at how the leading central banks as the U.S. Federal Reserve (the Fed) and the European central bank (ECB) has started to move in a monetary policy ‘ softer direction”.
So it is difficult to find any clear motivations for that interest rates would rise more powerful in the near future in any case.
