FX.co ★ Swedish Economy Shrinks Unexpectedly

In the first quarter of 2025, Sweden's economy contracted by 0.2% on a quarterly basis, surprising analysts who had anticipated a 0.1% growth and matching initial stagnant estimates. This contraction marks the first downturn since the final quarter of 2023, contrasting with a previously adjusted 0.5% expansion in Q4. Contributing factors include a significant 3.8% decrease in fixed investments, particularly in constructions and infrastructure, down from a 0.7% growth in the prior quarter. Consumer spending also dipped for the first time in nearly a year, decreasing by 0.2%, compared to a 0.6% rise before, while government expenditure remained stable at 0.1%. On a positive note, net trade had a favorable impact on the GDP, with exports growing by 1.8%, outpacing the mere 0.3% increase in imports. Yearly analysis reveals the GDP grew by 0.9% in Q1, slowing from a robust 2.4% in the preceding quarter, which was the most rapid expansion since Q3 2022.