Sweden’s Q2 GDP growth revised up to 0.5 pct, economy likely to expand 3 pct in FY 2016

Statistics Sweden upwardly revised Swedish second quarter GDP data yesterday as housing market gave mixed signals. The Sweden economic growth was upwardly revised to 0.5 percent quarter-on-quarter, revising by 0.2 percentage points. The first quarter growth was kept unchanged at 0.4 percent.

GDP prints for the previous years were also updated by Statistics Sweden. The GDP print was upwardly revised for 2014, whereas for 2015 it lowered it slightly.

The level of GDP, following the revisions, is slightly higher at 0.7 percent that earlier figures have implied. However, it does not alter the assessment of resource utilization much.

For the second quarter, the Statistics Sweden predominantly revised fixed investments upwards to a full 9 percent from 6.4 percent year-on-year. This is positive news. A risk of higher inventories was anticipated in the first half of 2016, which didn’t materialize, said Nordea Bank in a research note.

“Our instant view is that GDP growth will still be around 3% for FY 2016, in line with the Riksbank’s call”, added Nordea Bank.

Meanwhile, figures elsewhere indicated that apartment prices and single-family houses prices increased on a national level in August. But prices in Stockholm continued to be quite flat. Changes in trends usually begin in the capital city, therefore this is a sign that housing market is easing in Sweden, according to Nordea Bank.