Swedish retail sales continue on decent upward trend in September, household consumption to pick up

Swedish retail sales rose in September and continue to be on a decent upward trend. On a sequential basis, retail sales rose 0.3 percent, whereas it rose 2.6 percent on a year-on-year basis. Today’s data is in line with forecasts. So far in 2019, retail sales have been on an upward trend, although levelling out slightly in recent months.

The exchange rate is probably providing an extra boost to retail sales. The subdued SEK normally attracts foreign tourists, boosts border trade while Swedish households travel less abroad.

Rising unemployment and negative sentiment weigh on consumption, while low interest rates provide support, noted Nordea Bank. The Swedish central bank will most likely raise rates in December; however, the outlook for interest rates is low for very long.

“On balance, we expect retail sales to continue to rise and total household consumption to pick up gradually going forward and thus improve somewhat compared to the past two years’ sluggish trend”, added Nordea Bank.