Swedish economic recovery collapses in August
The recovery from the pandemic hit hard in Sweden in August with the economy contracting, with businesses producing less and households cutting back on consumption, data showed on Wednesday.
Sweden has rebounded quickly, with the economy reaching pre-pandemic size earlier this year. But bottlenecks and global supply chain issues have hit some manufacturers and raised questions about how long the economy can continue to run at full capacity.
“The data for August surprised on the negative side and put a downside risk on our forecast for 4.3% GDP growth in 2021,” Swedbank said in a note. “Confidence indicators however remain at high levels, pointing in a more positive direction.” In August, GDP decreased by 3.8%, seasonally adjusted and compared to the previous month, showed the preliminary compilation of the GDP indicator from Statistics Sweden.
It was the first time since May that the mths indicator has gone down. Economic activity increased by 2.4% in August 2021, after calendar adjustment, compared to August 2020. Other data for August showed that private sector production fell by 4.7% on the month with household consumption down 1.1%.
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