Swedish retail sales decline for a second straight month in July

Preliminary figures from Sweden’s statistical office showed on Monday that the nation's retails sales missed expectations, declined for a second straight month in July and at the fastest pace since December last year. The statistical agency attributed the weaker figures to base-effect. July 2015 was the strongest month of the year, with an increase in sales of 9.3 percent, the agency said.

Data showed that Swedish retail sales dropped a seasonally adjusted 0.9 percent m/m in July, compared to a 0.7 percent fall in the previous month. On a working day adjusted basis, retail sales grew 1.1 percent y/y in July, after a 3.9 percent gain in June. The pace of increase slowed for a second straight month from May's 5.7 percent.

Seperate data showed Swedish trade balance in July came in at SEK 0.5 billion, slightly higher than the SEK 0.4 billion recorded in July 2015. Both imports and exports, in terms of current prices, dropped 4 percent y/y. The low outcomes might partly be because July 2016 had two less working days than July 2015.

The Swedish economy expanded by around 4 percent in 2015, the fastest growth rate since 2010. Domestic demand was the main driver of growth, with a sharp rise in capital spending, and robust growth in household and government consumption.

Fitch Ratings on Friday has affirmed Sweden's Long-Term Foreign and Local Currency Issuer Default Ratings (IDR) at 'AAA' with a Stable Outlook. Fitch expects this pattern of growth to continue this year and over the next two years, with resilient, albeit easing growth in domestic demand partly offset by a drag from net trade.