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Fast Comment SwedenDowngrade of GDP growth in last few years; revisions in updated National Accounts

  1. Second quarter GDP growth revised down slightly q-o-q, compared to preliminary accounts
  2. But substantial downgrades to 2016 and 2017
  3. Overall outlook appears intact as underlying details remain quite strong
Second quarter GDP growth revised down slightly, compared to preliminary accounts
Statistics Sweden today revised down second quarter GDP growth, from 1.0 to 0.8 percent q-o-q. This might not sound too alarming, especially given the volatile nature of GDP data in the small open economy of Sweden. However, the statistics agency knocked almost a percentage point off annual growth, revising down from 3.3 to 2.5 percent y-o-y, calendar adjusted.
But substantial downgrades to 2016 and 2017
In the September release 2016 has also been more thoroughly accounted for, with new data input. It turns out that GDP growth was 0.5 percentage points lower than previously thought. 2017 has also been revised down somewhat and this feeds into 2018 as well, helping to explain the large downgrade to the current annual rate.
Overall outlook appears intact as underlying details remain quite strong
We note that the main drag on second quarter GDP stems from an upward revision of imports. At the same time several other demand side components are holding up well, notably household consumption, which has also been revised up for 2016. At this point, we do not worry about the business cycle as a broad range of indicators form a strong picture. We might adjust our forecast in due course, but our expectation for a gradual cooling down appears intact.


Lower GDP than previously thought 




Imports the biggest surprise (Q2 2018)



 Other drivers holding up well (Q2 2018)




Large upward revision to 2016 consumption - keep an eye on temporary drop in Q3 




Disclaimer

Johan Löf

Senior Economist

Sweden

jolo22@handelsbanken.se

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