Sweden Economy Shrinks in Q1

2026-05-29 06:25 By Judith Sib-at 1 min. read

The Swedish economy contracted by 0.2% quarter-on-quarter in the first quarter of 2026, confirming preliminary estimates and exceeding market expectations of a 0.1% fall.

This followed a revised 0.8% expansion in the previous quarter and marked the first contraction in a year.

Government spending declined (-2.1% vs 2.7% in Q4), while gross fixed capital formation also dropped (-2.3% vs 4.5%), largely due to lower investment in buildings and constructions.

Net trade also weighed on GDP, as imports (2.5% vs 0.2%) rose more than exports (2.2% vs -0.8%).

Meanwhile, household consumption increased (0.6% vs 0.6%), driven by spending on transport and housing.

Changes in inventories contributed positively, with an increase in industrial stockpiles.

On an annual basis, GDP rose by 2%, revised up from an initial estimate of 1.6% but falling short of market forecasts of a 2.3% increase.

The yearly growth matched the pace recorded in the previous quarter.



News Stream
Sweden Economy Shrinks in Q1
The Swedish economy contracted by 0.2% quarter-on-quarter in the first quarter of 2026, confirming preliminary estimates and exceeding market expectations of a 0.1% fall. This followed a revised 0.8% expansion in the previous quarter and marked the first contraction in a year. Government spending declined (-2.1% vs 2.7% in Q4), while gross fixed capital formation also dropped (-2.3% vs 4.5%), largely due to lower investment in buildings and constructions. Net trade also weighed on GDP, as imports (2.5% vs 0.2%) rose more than exports (2.2% vs -0.8%). Meanwhile, household consumption increased (0.6% vs 0.6%), driven by spending on transport and housing. Changes in inventories contributed positively, with an increase in industrial stockpiles. On an annual basis, GDP rose by 2%, revised up from an initial estimate of 1.6% but falling short of market forecasts of a 2.3% increase. The yearly growth matched the pace recorded in the previous quarter.
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