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SWEDEN: Weaker-than-expected Q3 GDP Indicator Will Fuel 50bp Cut Speculation

SWEDEN
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The Swedish Q3 GDP indicator was weaker than consensus at -0.1% Q/Q (vs -0.3% prior).  Analysts had expected a 0.3% Q/Q reading while the Riksbank projected 0.2% Q/Q in the September MPR.  The indicator should be interpreted with caution, as it has not been a good predictor of actual GDP outcomes this year. However, it still makes the November 7 Riksbank decision a closer call between a 25bp or 50bp cut in our view.

  • Very few details of underlying drivers are provided in the flash release, which notes that weak readings in July and September drove the negative quarterly print. The final Q3 GDP release is due at the end of November.
  • Elsewhere, September retail sales were also weaker-than-expected at -0.1% M/M (vs 0.2% cons), possibly weighing on aggregate consumption in Q3.
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The Swedish Q3 GDP indicator was weaker than consensus at -0.1% Q/Q (vs -0.3% prior).  Analysts had expected a 0.3% Q/Q reading while the Riksbank projected 0.2% Q/Q in the September MPR.  The indicator should be interpreted with caution, as it has not been a good predictor of actual GDP outcomes this year. However, it still makes the November 7 Riksbank decision a closer call between a 25bp or 50bp cut in our view.

  • Very few details of underlying drivers are provided in the flash release, which notes that weak readings in July and September drove the negative quarterly print. The final Q3 GDP release is due at the end of November.
  • Elsewhere, September retail sales were also weaker-than-expected at -0.1% M/M (vs 0.2% cons), possibly weighing on aggregate consumption in Q3.