Aug. 29 (Bloomberg) -- Swedish retail sales unexpectedly fell in July as a recovery in the largest Nordic economy is proving slow amid high unemployment.
The drop should be seen as a “temporary set-back” as nice weather “may have held back consumers from shopping,” Andreas Wallstroem, an analyst at Nordea Bank AB, said in a note. “Favorable conditions in the household sector, such as solid income growth and low inflation, should continue to support consumption.”
Sales fell 0.7 percent in July after expanding 0.6 percent the previous month, Stockholm-based Statistics Sweden said today. The median estimate in a survey of six economists by Bloomberg was for a 0.1 percent gain. Sales rose 2.1 percent in the year, slowing from a revised 3.5 percent in June.
Sweden’s central bank will keep its main lending rate on hold until the first quarter 2015 to support a recovery of the country’s $540 billion economy, the Swedish National Institute of Economic Research predicted yesterday.
The krona slid 0.1 percent to 8.6906 per euro as of 11:05 a.m. in Stockholm.
“Increased consumer and business confidence points to a turnaround in the economy toward the end of the year,” NIER said. “The current low levels of resource utilization mean that recovery will be protracted, and so monetary policy will remain expansionary for several years to come.”
Sweden’s economy, whose exports account for about half of its output, will expand 1.5 percent this year and 3 percent in 2014, Svenska Handelsbanken AB forecast today. Still, unemployment will rise to an average 8.3 percent in 2014 from 8.1 percent this year, it said.
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