Anders Bergvall, Senior Economist at Sweden’s Handelsbanken, has indicated in a report that Sweden’s GDP experienced a significant decline in the second quarter and is likely to continue declining in the latter half of the year, potentially leading the economy into a mild recession.
Data from Tuesday revealed that the GDP contracted by 0.8% on a quarterly basis in the second quarter and by 1.0% year-on-year. While these figures were stronger than initial estimates, they still fell short of the projections made by Sweden’s central bank.
Bergvall highlighted that the widespread reduction in global and domestic demand has resulted in decreased commodity exports and declining inventories.
“Inflation has begun to slow down, but potential inflation remains excessively high. Hence, we maintain our forecast for two more interest rate hikes in September and November, each by 25 basis points,” Bergvall stated.
