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Sweden’s economy expanded at an impressive 1 per cent pace in the last three months of the year, ranking it as one of the best performing economies in Europe in 2016.
Year-on-year expansion hit 2.3 per cent with the quarterly GDP performance beating a 0.9 per cent average forecast collected by Reuters. The country’s third-quarter numbers were also revised up to 0.5 per cent from 0.3 per cent.
By comparison, Germany and France both expanded by 0.4 per cent in the quarter, with the UK registering 0.7 per cent growth.
Sweden’s annual growth also came in better than the Riksbank’s 2.2 per cent forecast and the central bank is likely to be encouraged by the performance which should support higher inflation. Policymakers have been keeping interest rates at record negative lows since 2015 and carrying out bond-buying in a bid to stoke inflationary pressures.
Latest consumer price inflation revealed a softening inflation at the start of the year however, with the annual rate of price growth at 1.4 per cent and down from 1.7 per cent in December.
Growth was driven by a robust 0.9 per cent rise in investment (known as gross fixed capital formation), a 1.8 per cent acceleration in exports and 1.1 per cent increase in the production of goods and services, said Sweden’s stats office.
A strengthening currency has hampered the Riksbank’s attempts to revive inflation over the last two years.
The krona strengthened by 0.3 per against the euro following the GDP release this morning to SKr9.5676 to the euro.