Sweden’s retail sales growth slows in February, annual figures likely to drop going forward

Sweden posted below expected retail sales data after registering high and upward revised data in January. The country’s retail sales recorded a growth of 3.9% y/y in February, as compared with projections of 4.2% y/y growth. January’s retail sales data was revised upwardly to 4.7% from initial figure of 4%.

The trend of retail sales is slightly weaker in recent months even if annual growth figures continue to be high. Retail sales in terms of volume have not grown since November 2015. Sweden’s retail sales on a monthly basis dropped 0.2%, as compared with the consensus expectation of 0.5%, while it grew 3.9% y/y, as compared with consensus expectation of 4.2%.

According to Nordea Bank, annual growth numbers in retail sales is likely to decline going forward. This is because the housing market is likely to decelerate that usually depresses consumer consumption.

Meanwhile, other figures indicate that goods exports are continuing with their slow rebound in the start of 2016. Figures for February were weak; however, the larger calendar effect makes it difficult for the figures to interpret. Goods import are growing rapidly, indicating low trade balance. The nation posted trade balance of SEK -0.2bn as compared with consensus expectation of 2.5 billion. Goods exports at current prices grew 1% y/y, whereas imports of goods rose 4% y/y.