Five years of constant growth could be over, according to several of the big banks, after a series of negative signals around household consumption.
After negative construction statistics, SEB lowered its forecast for the Swedish economy and now believes the economy shrank by 0.2 per cent during the third.
Robert Bergqvist, chief economist at SEB, says there are several contributing factors. Household consumption has fallen which could be due to the political chaos in Sweden’s Riksdag; another factor is that the Riksbank is planning to raise the interest rate in December or February.
Michael Grahn, head economist at Danske Bank, also believes the economy has shrunk during the quarter. He cites falling consumption but also that companies have started selling products from their inventories instead of producing more in factories.
Manufacturing companies have cut production and exports and imports have fallen.
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