Swedish Retail Sales Grow Faster as Households Buoy Economy
Swedish retail sales growth accelerated for a second month in May as the Nordic region’s largest economy gets help for its rebound from household spending.
Sales growth accelerated to an annual 3.1 percent from 2 percent in April, Stockholm-based Statistics Sweden said today. The median estimate in a survey of four economists by Bloomberg was for sales to grow 2.5 percent. Monthly retail sales rose 0.8 percent.
Swedish consumers will drive a recovery in the economy this year as gross domestic product expands 1.5 percent from 0.7 percent in 2012, the National Institute of Economic Research predicted last week. Swedish seasonally-adjusted unemployment unexpectedly fell to 7.9 percent last month.
The krona strengthened as much as 0.5 percent before trading 0.3 percent higher at 8.7517 against the euro at 9:50 a.m. in the Swedish capital.
“Households are in a good position to spend more, with rising real disposable income, a historically high saving ratio and high levels of wealth,” NIER said in a statement. “Household consumption will be an important driver of demand, especially this year.”
Sweden’s central bank in April kept its main lending rate unchanged at 1 percent, citing signs the economy is recovering on the back of bright spots in the U.S. and Asia. The Riksbank ended a yearlong spate of rate cuts last December that had been intended to boost economic growth amid weak demand for Swedish exports from the shrinking euro area.
“Next year, external demand will grow more quickly, and exports will make a greater contribution to the recovery” as the economy expands 2.5 percent, the research institute said.
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