July 8 (Bloomberg) -- Sweden’s krona depreciated after a report showed a deepening manufacturing slump in the largest Nordic economy.
The krona fell as much as 0.9 percent against the euro and traded 0.8 percent lower at 8.8023 per euro as of 10:53 a.m. in Stockholm. It slid 0.8 percent to 6.8586 per dollar, the second-biggest decliner among 16 major currencies tracked by Bloomberg.
Industrial production fell a monthly 2.6 percent in May after declining a revised 1.1 percent the previous month, Stockholm-based Statistics Sweden said. Production was estimated to rise 0.6 percent, according to the median forecast in a Bloomberg survey of four economists. Output fell an annual 7.3 percent after falling a revised 1.1 percent the previous month.
“The year-over-year rates for both industrial and service production indicate that the 1.7 percent year-over-year for GDP in the first quarter will not be repeated in the second quarter,” Mikael Sarwe, an analyst at Nordea Bank AB, said in an e-mailed note. “GDP might thus fall quarter-over-quarter in Q2, which can be compared with the Riksbank forecast of an increase of 0.3 percent.”
The Swedish central bank last week kept benchmark interest rates unchanged and stuck to a forecast for tightening to start in the second half of next year, saying the economy was on the way to a recovery. The bank said it sees the rate at an average of 1 percent in the third quarter and 0.9 percent in the fourth quarter, maintaining a small chance for a reduction.
Industrial orders fell a monthly 2.6 percent in May and decreased an annual 6.1 percent, Statistics Sweden said today. Exports orders fell 2.1 percent and domestic orders slid 3.5 percent in the month.
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