Tendency Survey indicates positive sign for Sweden growth rate

Sweden households' inflation expectations remained close to 2% (up 0.1% point to 1.9% in September). This is most likely welcomed by the Riksbank, although the survey is a bit tricky to interpret after the changed method earlier this year.

All in all, the strong growth in the economy will make the Riksbank more confident in its view that higher resource utilization will lift cost pressures and inflation. However, the risk for SEK getting too strong is still looming in the background, which is the main reason to why the Riksbank is expected to do more, says Nordea Bank.

Sweden GDP rose by 3.3% y/y in Q2 and today's survey suggests that growth will accelerate further in Q3. This is stronger than most forecasts, including the Riksbank's.

Confidence rose or remained high in most business sectors. The sharp rise in confidence in the manufacturing industry stood out and was the main surprise.

Retailers price expectations, which the Riksbank has referred to in recent speeches, edged down in September but still signals higher inflation. If the SEK will continue to strengthen, retailer's prices expectations should decline further, added Nordea Bank. The consumer confidence fell, as it was expected.