Swedish retail sales grow above expectations in March

Swedish retail sales grew sequentially in March. Sales rose 1.2 percent on the month, whereas it grew 2.9 percent year-on-year. This is slightly above expectations. On average, retail sales have risen 1.5 percent year-on-year in the first quarter, as compared with the 2.5 percent year-on-year growth in the fourth quarter of last year.

The main question is how the downturn on the housing market would impact Swedish household consumption. It is expected to dampen households’ propensity to spend. The Swedish central bank downwardly revised its projection for household consumption for this year to 2.5 percent, which is still too positive, stated Nordea Bank in a research report. Slowdown in domestic demand growth is another reason for the Riksbank to stay on hold.

Elsewhere, figures indicated that household housing loans rose 7.2 percent year-on-year in March, unchanged from February. The monthly growth rate has been relatively steady in the past few y ears and indicate little signs of deceleration.

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