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Exports growth in Sweden likely to ease slightly in 2016 and 2017
Global financial market has been uncertain since autumn 2015. The market turmoil reached advanced economies in 2016 resulting in a series of lowering interest rates and sell-offs in stock markets. The market volatility was triggered mainly from weaker growth in China and uncertainty regarding the ongoing rebound in the US.
However, markets have calmed now and regained most of the losses, noted Danske Bank. Even if the data indicated certain reduction in momentum, the growth levels continue to be good for most of the markets for Sweden. Moreover, the nation’s monetary policy continues to underpin growth in international investment demand and demand in general. Nevertheless, the country’s exports industry might get badly impacted as global commodity markets have been hit hard and related industries might lower investments, said Danske Bank.
“We expect import demand growth on Sweden’s export markets (Swedish world market growth) to rise, although slowly, and to remain below historical averages. In 2016, we expect world market growth to reach 4.5% y/y and subside slightly, to 4.3% y/y, in 2017”, added Danske Bank.
Swedish exports growth accelerated throughout most of 2015. In Q4, goods exports also started accelerating. Growth recorded in 2015 is very much in contrast to weak export growth recorded in 2014.
The solid growth in goods exports recorded in Q4 and the strong services exports are expected to be temporary, according to Danske Bank. Hence, consecutive exports growth is expected to slightly decline in the course of forecast period, added Danske Bank. The volatility in external and financial sector underlines a non-negligible risk of weaker import demand on Swedish export markets.
“Overall, entering 2016 with very strong momentum from 2015, we expect Swedish exports to grow 6.0% y/y for the full-year 2016 and to reach 3.6% y/y in 2017”, notes Danske Bank.