Trade War Looms Large as Sweden’s Economic Engine Sputters
The latest gross domestic product data indicate the economy grew a meagre 0.2% in the first three months of the year. The annual expansion likely slowed to 1.7%. The export-dependent nation is feeling the weakness that’s already hit the euro area, its largest trading partner. Exports are losing momentum and domestic demand is being held back by a wobbly housing market, which is curtailing construction and making households more reluctant to spend. Home to Volvo, Sweden is on the front-line should U.S. President Donald Trump decide to impose import tariffs on European cars. Such a scenario would probably make it impossible for the Riksbank to go through with its plans to lift rates above zero again. Good news can be found in the labour market, with employment and participation rates at record high levels.
- Bloomberg -