Swedish economy’s confidence indicator falls further in April, inflation expectations remain low

Confidence indicator for Sweden’s entire economy further declined in April. This implies that the economic growth has peaked, even if it is in line with strong GDP growth, according to Nordea Bank. Sweden’s inflation expectations continue to be low, while bottlenecks are growing. According to data, credit growth is levelling out, while exports’ rebound continues.

Business sentiment in Sweden fell to 106.3, dropping by 0.2 points, while the manufacturing sentiment fell. The manufacturing industry’s confidence fell more than anticipated. Confidence in construction and private services increased or was unchanged. Employment plans dropped; however it continues to be at strong levels. Shortage of labor in the business sector increased sharply.

Meanwhile, consumer sentiment declined to 97.1, below projections. Sentiment has remained around 100 for two years, whereas consumption grew 2%-3%. Retailers price plans continued to be mainly the same in April. This implies that inflation is expected to move sideways, noted Nordea Bank. Inflation expectations continue to be wary for the central bank. Consumer’s price expectations continue to the same at 1.5%, much lower than the target rate of 2%.