SWEDEN
Overall, the March activity data sheds little light on what drove the weak Q1 flash GDP release. Household consumption and private sector production both rose on a M/M and Y/Y basis in March. This comes after the March monthly GDP indicator printed at -0.3% M/M and -1.1% Y/Y, which helped pull the flash Q1 GDP estimate down to -0.1% Q/Q and -1.1% Y/Y – below consensus expectations and the Riksbank’s forecasts.
- The monthly GDP indicators and flash quarterly estimates are often revised – the latter sometimes heavily – so it is hard to read too much into the data at this stage. However, the activity data could suggest scope for an upward revision to the quarterly estimate.
- A reminder that the flash quarterly estimate contains no details on the sub-components of GDP.
- The domestic activity data may also suggest that the GDP indicator’s weakness in March may have been driven by non-domestic components (i.e net trade). However, real import/export data up to February indicates a net trade surplus for the first two months Q1. Information on March’s real trade figures will be released on May 28, two days before the final Q1 GDP estimate.
- For the quarterly reading, we note that the Government’s primary balance was in surplus through January-March, which will have contributed to the downside re: the Q1 GDP estimate.
- Household consumption rose 0.5% M/M (vs -0.2% prior) and 1.2% Y/Y (vs 0.2% prior). Both of February’s monthly and annual values saw upward revisions.
- Meanwhile, private sector production rose 0.6% M/M (vs 0.2% prior) and 0.4% Y/Y (vs -1.3% prior), with February’s monthly and annual values seeing downward revisions.
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