Swedish economy contracts more than expected

STOCKHOLM

The Swedish economy contracted more than expected in the second quarter as exports from the Nordic country fell, official statistics showed on July 28.

Sweden's economy shrank by 1.5 percent in the April-to-June period compared to the same quarter last year, according to Statistics Sweden's preliminary data.

Analysts had expected a drop of 0.5 percent, according to Bloomberg.

There are several reasons for the decrease "but one factor in the last month of the quarter was a decline in exports of goods," Mattias Kain Wyatt, economist at Statistics Sweden, said in a statement.

In June, gross domestic product was 3.6 percent lower than a year earlier.

Compared to the second quarter of 2022, GDP fell by 2.4 percent between April and June this year.

The top Nordic economy avoided a technical recession when it expanded 0.6 percent in first quarter, following a 0.2 percent contraction in the fourth quarter of 2022.

The final GDP figure for the second quarter is set to be published on August 29.

Sweden's central bank, the Riksbank, has raised its key interest rate several times as the country combats persistent inflation.

It reached the highest level in nearly 15 years when the Riksbank announced an increase of 0.25 percentage points to 3.75 percent at the end of June.