• Sweden slips back into recession

    Sweden slips back into recession

    source : http://www.swedishwire.com/business/3102-sweden-slips-back-into-recession

    Companies - Published Monday, 01 March 2010 10:12 | Author: Johan Nylander

    Interest rate hike this summer less likely as Swedish economy unexpectedly declined last quarter.

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    Sweden's economy last year suffered its largest annual setback in more than half a century as gross domestic product "dropped 4.9 percent compared to 2008, which is the largest annual fall since World War II," Statistics Sweden said Monday.

    The economy surprisingly fell 0.6 percent in the fourth quarter compared to the third quarter, sending the economy back into recession.

    Fourth-quarter GDP was expected to have increased by 0.3 percent during the quarter, according to a Reuters poll.

    Last month the Swedish Riksbank said the key repo rate would be hiked this summer as "upturn in economy activity rests on more solid ground". But the unexpected GDP contraction now makes analysts suggest caution.

    "These figures are not a trigger for the Riksbank to raise rates," Knut Hallberg, economist at Swedbank, told Reuters. "The recovery in Sweden is going to take time."

    Swedish economy grew in the third quarter from the second, the statistics office said last November, indicating that the decline of the economy had came to a halt.

    Last Updated (Monday, 01 March 2010 14:34)

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