Swedish retail sales fall above expectations in July

Swedish retail sales fell more than expected in July after dropping sharply in the prior month. On a year on year basis, retail sales in Sweden fell 1.2 percent, whereas it dropped 1 percent on a sequential basis.

July was a very warm month for Sweden. Thus, much implies that households were not in shopping malls during the heat, explaining much of the subdued reading.

Growth in households’ consumption is expected to decelerate; however, the weak retail readings in the summer cannot be used for evidence, noted Nordea Bank in a research report.

Meanwhile, figures indicated that trade balance stood at SEK 0.0 billion in July, as compared with the -1.8 billion recorded in July 2017. For the past 12 months, the trade balance has been negative in 8 months, explaining a normalization after decades of surplus. Exports continued to remain weak in July. Export indicators appear to look bleak in the months ahead, raising question marks for external demand and GDP growth.