2006 Economy Starts on Strong Note

New data shows that Swedish industrial output and orders surged in January, while the jobless rate dipped in the following month, confirming the economy started the year on a strong note.

According to the Statistics office, after a slowdown at the end of last year, manufacturing industry picked up pace in January with production rising 5.9 percent year-on-year and order books surging 10.6 percent on the back of a strong export market.

Swedish debt yields rose about 3 basis points after the release while the Swedish Krona traded virtually unchanged.

The Riksbank has raised interest rates twice this year, taking its main rate to 2.00 percent as it looks to rein in what it considers loose monetary policy against a backdrop of stronggrowth and borrowing plus rising house prices.

But with inflation below the Riksbank’s 2 percent target and weaker than expected fourth quarter growth, most analysts now expect the bank to take a breather, although it is expected to raise rates again in June.