Sweden | GDP growth forecast nudged down to 3.2% due to weaker near-term activity

Growth in Q3 and previous quarters was revised up, pushing up our 2021 forecast to 4.7% from 4.3%. But we have lowered our near-term forecast due to the emergence of the Omicron variant, although this should be compensated for by faster growth later next year to give 2022 growth of 3.2%, slightly lower than projected last month.

What you will learn:

We expect Sweden to have minimal formal restrictions, although consumers are likely to voluntarily change their behaviour during the winter months.
 The job recovery continues at a steady pace. According to the Public Employment Service, the unemployment rate eased to 7.2% in November, in line with the average just before the pandemic.
Headline CPI inflation jumped to 3.3% y/y in November from 2.8% in October, in line with our forecast, as electricity prices surged again.

Topics: Europe, Consumption, Inflation, Labour markets, Coronavirus, GDP, Unemployment, Employment, Recovery, Nordic, Sweden, Country Economic Forecast, Outlook, CPI inflation, Energy prices