Swedish retail sales trend continues to be low, household consumption to grow only gradually in 2019

Swedish retail sales grew in February. On a sequential basis, retail sales were up 0.2 percent, whereas it rose 3 percent on a year-on-year basis. The outcome was consistent with consensus expectations. Meanwhile, the data for January was downwardly revised to 0.7 percent growth sequentially and 1.7 percent year-on-year.

The rise in the year-on-year figure was driven by base effects. Sales were low in February 2018. However, the trend continues to be subdued.

The wider picture is that household demand is sluggish. Uncertainty about housing market is being a drag on consumption. Fluctuation in stock markets, reflecting uncertain global growth prospects, is a negative factor as well.

“We expect household consumption to grow only gradually this year and to undershoot the Riksbank’s forecast. Weak domestic demand is one of several challenges for the Riksbank, underlining that a rate hike will not be on the agenda this year”, said Nordea Bank.