Inflation and rising borrowing costs have depressed private spending, an official report shows
Retail sales in Sweden fell the most so far last month, as inflation and skyrocketing borrowing costs continued to squeeze consumers’ purchasing power.
In February, retail sales in the Nordic region’s largest economy fell 9.4% compared to the same period last year, driven by a decline in durable goods, which saw the biggest drop in sales since 1992, Statistics Sweden reported on Wednesday.
Economists attribute the weak results to persistent pressure on households’ real disposable incomes and purchasing power, caused by the highest inflation in 30 years and continued interest rate hikes by the Swedish central bank.
“The current inflation clearly puts the retail trade under increasing pressure,” writes Nordea economist Gustav Helgesson in a note. “Parts of the retail sector are already in recession. Today’s report reinforces our view that private consumption will decline this year,” he added.
Sweden is going through one of the worst economic downturns in its modern history, with inflation among the highest in Europe and the highest outside Eastern Europe, economists say.
The country has also seen a drastic decline in the property sector, with house prices falling to their lowest level in years, while consumer spending has plummeted due to the cost of living crisis.
Swedish GDP shrank by 0.5% in the last three months of 2022, indicating that the country has already entered a recession.
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(RT.com)
Source: sn.dk