Sweden’s Growth Surprise Shows Strong Start to Fourth Quarter

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Sweden’s economy grew more than expected in October, adding evidence of a broad-based recovery in the largest Nordic nation that’s had a slower growth in Covid-19 infections than elsewhere in Europe.

Preliminary data for October showed that gross domestic product rose 1.2% from the previous month, higher than all estimates in a Bloomberg survey of economists which had a median estimate for a 0.3% expansion. 

“The growth is quite broad-based, with positive figures in several major industries among both service producers and in manufacturing,” Neda Shahbazi, a statistician at Statistics Sweden, said in a statement. 

Sweden has bounced back from last year’s slump earlier than many other European countries, and the country lifted all Covid-related restrictions on Sept. 29. While infections and hospitalization have increased in recent weeks, they remain at a lower level than in earlier phases of the pandemic, in contrast with neighboring countries such as Norway and Denmark, which are currently seeing the highest case rates yet. 

Swedbank economists Pernilla Johansson and Maria Wallin Fredholm noted that while economic activity in October indicates stronger fourth-quarter growth than they had previously expected, the pandemic could still spoil the party. 

The risks are “tilted to the downside,” they said. “The spread of the omicron coronavirus variant could lead to further restrictions dampening economic activity.”

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