Swedish exports’ outlook remains positive, likely to expand 3.6 pct in 2017

The international demand is expected to increase in years ahead, stated Danske Bank in a research report. According to the Danske Bank, the global economy is expected to expand 3.2 percent this year and 3.1 percent the next year.

Global GDP growth is one measure of international demand. But while measuring Swedish exports, it has to be taken into consideration that Swedish export markets have a different composition than global GDP, stated Danske Bank. The import growth on typical Swedish export markets implies a drop from a likely 4.5 percent year-on-year this year to around 4 percent in 2018.

The international demand for input and investment goods also need to be taken into consideration while balance Swedish exports outlook as they make up the lion’s share of Swedish exports. Global investments growth is expected to reach 1.5 percent in 2017 and surpass 4.5 percent in 2018.

In all, the Swedish exports’ outlook continues to be positive. However, the case for increasing international demand has softened slightly due to a less buoyant outlook for economic policy. This is especially true for two of Sweden’s biggest export markets – China and the U.S.

Thus, Sweden’s exports are expected to grow 3.6 percent year-on-year in 2017 and 3.2 percent next year, added Danske Bank. The contribution to the economic growth from net exports is expected to be 0.3 percentage points this year and 0.1 percentage points in 2018. Meanwhile, the expected solid growth in housing investments also pushes up imports to a certain extent, lowering the net contribution from external trade.