Sweden's Economy Enters Technical Recession

STOCKHOLM (Reuters) – Sweden's economy has slipped into a technical recession as gross domestic product (GDP) fell by 0.1% in the third quarter compared to the previous quarter, according to preliminary figures from the statistics office released on Tuesday.

The GDP also declined in the second quarter, marking two consecutive quarters of contraction, which constitutes a recession. In comparison to the same quarter last year, GDP was down by 0.1%.

Analysts had anticipated a 0.4% expansion in the July-September quarter compared to the April-June period, with an expected growth of 0.7% compared to the previous year.

It is noted that these preliminary figures may undergo revisions once final data is released. In September, GDP increased by 0.1% year-on-year, yet fell 0.4% when compared to August.

"Sweden's gross domestic product decreased in September, which, together with weak performance in July, contributed to negative growth for the third quarter compared to the previous quarter," stated Sweden's statistics office.

The economy has shown sluggish performance over the past year. During its recent meeting in September, the Riksbank (Swedish central bank) indicated it might cut the policy rate at the two remaining meetings for the year, with one potential cut being a half percentage-point and potentially more in the first half of 2025.

Swedbank commented, "The Swedish economy remains stagnant. The outcome suggests a somewhat higher probability for a bigger move in November, and we maintain our call for a 50-point rate cut at the Riksbank's policy meeting next week."