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Swedish economic sentiment remains largely unchanged in June

The Swedish Economic Sentiment Indicator continued to be largely unchanged in June. The NIER June Tendency Survey showed that the overall sentiment in the economy (ESI) remained stable at a sound level of 108.7 in the month. The total business sector sentiment also remained stable at 106.2.

The consumer confidence CCI dropped further, in contrast to projection. The consumer confidence indicator came in at 98.5, the lowest readings for two years. Household’s expectations on their own economy dropped and are at its lowest levels for four years.

Manufacturing industry continues to be rather optimistic, even if it is lower than in previous months. The sentiment index came in at 116.1 as compared with 118.5 seen in the prior month. The construction industry sentiment rebounded slightly.

Companies’ employment plans in the total business sector continued to be largely unchanged, and are still at decent levels. Households’ inflation expectations rose slightly to 3.4 percent, the highest reading in several years. Expectations according to the old method rose too. Retailers’ price plans continued to be high, possibly because of the subdued krona.

Overall, the sentiment in business sector continues to be healthy, suggesting sustained GDP growth, noted Nordea Bank in a research report. Furthermore, the rise in inflation expectations is good news for the central bank. But the pessimism among households’ raises question marks for domestic demand and therefore for the growth outlook. Thus, it is a mixed bag for the Riksbank, stated Nordea Bank.

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