Sweden's economy slows down

"If growth remains this low there will be some fallout."
1:52 min

Sweden's GDP fell 0.1 per cent in the second quarter from the first three months of the year, according to Statistics Sweden.

This is slightly below expectations, with analysts having forecasted an increase of 0.1 per cent.  

"The fact is that it is a touch weaker than we had expected," Mats Dillén, Director of the National Institute of Economic Research, told Swedish Radio News.

Dillén remains confident however that the economy will reach the 1.5% GDP growth that the institute has projected for the year, with a strong uptick in activity in the autumn.

Speaking to the TT news agency, Swedish finance minister Anders Borg said that the figures showed the economy recovering, but slowly and weakly.  

Continued uncertainty in Europe had impacted the figures, Borg said, adding that the economy still needed support.

Interest rates fell slightly on the release of the figures, and the Swedish krona lost ground against both the euro and the US dollar.

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