Confidence indicator for Swedish economy rises further in June

The sentiment indicator for the Swedish economy rose slightly further in June and continues to imply a very high GDP growth. But the indicator has overrated actual growth noticeably in quarters ahead. The sentiment for overall economy rose to 112.1 from 111. On the contrary, confidence in the manufacturing sector improved from already elevated levels, noted Nordea Bank in a research report. Sentiment for manufacturing industry rose to 119.9 from 117.

Sentiment was up in all other business sectors. Moreover, firms’ employment plans continues to be expansionary. However, consumer sentiment dropped slightly. It fell to 102.5 from 105.9. Confidence indicator for private services sector rose to 104.6 from 104.1, while for total business sector the sentiment rose to 110.3 from 107.7.

Household’s inflation expectations rose to 2.6 percent. However, according to the old method, expectations came out at 1.9 percent. Overall, the report shows a continued high growth momentum in the economy, stated Nordea Bank. But the indicator has overrated actual growth notably in recent quarters. In the first quarter, GDP expanded 2.2 percent in the year while the indicator pointed a growth above 5 percent.

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