Swedish household consumption rises strongly in April

Swedish household consumption has rebounded in recent months. Revised data indicated that household consumption was subdued at the start of the year, and even softer than previous figures have implied. Household consumption growth was downwardly revised by 0.6 percentage point to just 1.5 percent year-on-year on average for the first quarter, showed monthly statistics. On a sequential basis, household consumption rose 0.5 percent sequentially, while it rose 3.1 percent on a year-on-year basis.

Consumption has rebounded noticeably in March and April. The momentum in recent months is rather solid, something that the Riksbank would take notice of. The rebound would ease worries that housing market development would be a drag on consumption. Furthermore, Statistic Sweden’s figures for house prices released today indicate that the downturn in prices is restricted so far.

For consumption, there might be some impacts of the subdued SEK at play, though. Households’ consumption abroad is not included in the monthly figures but in the National Accounts. If Swedish household travel less abroad, which they tend to do when the SEK is subdued, this would stimulate consumption according to the monthly figures as more purchases are made in Sweden, but less so according to the National Accounts, stated Nordea Bank in a research report.

“While today’s figures point to some upside risks to our view, we still forecast consumption to slow, not in any dramatic way but still below the Riksbank’s forecast for FY 2018 at 2.5 percent”, added Nordea Bank.

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