SWEDEN
The February Economic Tendency Indicator saw a large increase in the balance of retail sector firms looking to increase selling prices in the next 3 months, with services expected prices also moving higher. However, a solid pullback in consumer confidence dampens the hawkish message form the survey. On balance, this probably supports the Riksbank remaining on hold in March (in line with market pricing), but keeps the door open to another cut in Q2, particularly if hard domestic demand data and tariff uncertainty remains prevalent.
- Overall industry expected prices rose to 22 (vs 17 prior, highest since May 2023), driven by retail (36 vs 23 prior) and services (19 vs 15 prior). Within retail, grocery industry respondents saw the highest expected prices, which poses further upside risks to food inflation going forward (alongside the signals from PPI data).
- Consumer confidence fell to 95.0 (vs 98.3 prior, downwardly revised from 99.1 initial). This was driven by a sharp fall in respondents’ perception of the “the general economic situation in Sweden over the next 12 months” to -12 (vs +8 prior). Expectations for unemployment over the next 12 months also rose notably to 33 (vs 19 prior).
- Overall industry sentiment rose to 101.6 (vs 100.8 prior), with all sectors other than construction seeing increases.
- Taken together, the overall Economic Tendency Indicator eased a touch to 97.1 (vs 97.4 prior, upwardly revised from 97.4 initial).
- Final Q4 GDP is due tomorrow, alongside January retail sales data.
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