Senate Passes Bipartisan Budget Deal Rolling Back $63 Billion in Cuts
Swedish Economy Expands More Than Estimated
Gross domestic product grew an annual 4.6 percent in the third quarter, slowing from a revised 4.7 percent in the prior three-month period, Stockholm-based Statistics Sweden said today. Growth was forecast at 3.4 percent, according to the median estimate in a survey of 15 economists. Output expanded 1.6 percent from the period through June.
“Exports are contributing strongly but considering what’s happening around the world this is probably the last time we’ll see that kind of strong figure,” said Annika Winsth, chief economist at Nordea Bank AB in Stockholm. The figure means Sweden’s central bank is less likely to cut its benchmark interest rate at its meeting next month, she said.
Sweden’s central bank, the Riksbank, last month kept its benchmark interest rate unchanged and signaled it will hold back on increases to safeguard the largest Nordic economy’s expansion. Finance Minister Anders Borg has said the government stands ready to add stimulus to the economy should the need arise, adding such measures won’t jeopardize Sweden’s fiscal health thanks to its budget surpluses.
The krona gained 0.5 percent against the euro to trade at 9.2392 as of 10:01 a.m. in Stockholm. Against the dollar, the currency rose 0.5 percent to 6.9353.
Net exports, which adjust for the effect of imports, contributed 2.5 percentage points to annual GDP growth as exports grew 8.2 percent and imports rose 3.8 percent. Fixed investments contributed 1 percentage point, household spending 0.4 point, government expenditure 0.5 point and inventories 0.2 point.
Sweden has reduced its debt burden since the global financial crisis started in 2007, and will post a 0.1 percent budget surplus this year and be in balance next, the Organization for Economic Cooperation and Development forecast yesterday. The economy surged 5.6 percent in 2010, which was the most in the European Union.
Sweden’s general government debt will dwindle to 35.9 percent of GDP next year, compared with 90.6 percent for the euro area, the OECD said. The economy, home to companies such as wireless network maker Ericsson AB (ERICB) and appliance maker Electrolux AB (ELUXB), will expand 4.1 percent in 2011, more than twice the 1.6 percent rate in the euro area, the group said.
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