Swedish economy grew in October, but clouds gathering

Sweden’s economy grew strongly in October, but a slowdown looks to be on the way as the economy grapples with soaring inflation and softening demand, data showed on Wednesday.

Gross domestic product increased 0.7% in October from the previous month and 2.0% against the same month a year earlier, a preliminary estimate by the Statistics Office showed on Wednesday.

But other data showed a more mixed picture.

Household consumption was flat compared to the year earlier while new orders for the industrial sector were down 7.1%.

Overall production in the private sector rose 3.2%.

Sweden’s economy has been resilient so far this year, with gross domestic product expanding 2.5% in the third quarter compared to the year-earlier period.

But the war in Ukraine and lingering effects from the pandemic have sent prices soaring, forcing the Riksbank to jack up interest rates and squeezing households, many of whom have hefty mortgages, taken on when borrowing was cheap.

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