Swedish economy likely to have rebounded sharply in Q3 2020
Swedish economic growth data for the third quarter is set to release this week. According to a Nordea Bank research report, the GDP is likely to have rebounded sharply in the September quarter. In the previous quarter, GDP had fallen 8 percent quarter-on-quarter. The economy is expected to have grown 5 percent, stated Nordea Bank. If the forecast holds, over half the ground lost would have been recovered in the autumn.
The unexpectedly solid rebound is mainly because of exports of goods, which make up 35 percent of GDP. In the third quarter, exports reached pre-crisis levels in August and September. Imports have also recovered. The high imports are possibly due to the export industry’s more solid demand for input goods but indicate increased domestic demand. Household consumption rebounded in the third quarter, but it still has some way to go to reach last year’s levels.
Meanwhile, the labor market reversal and stronger demand for labor strengthen the scenario of a recovery in economic activity in the third quarter.
“All in all, large areas of the economy were well on the way to normalising in Q3. Some industries such as airlines, hotels, culture, and events are still very badly affected, though. Although they make up only 3 percent of GDP, they still act as a drag and slow down the recovery”, added Nordea Bank.