Sweden's economy contracted as initially estimated in the first quarter amid weaker developments in investment and government spending, the latest data from Statistics Sweden showed on Friday.
Gross domestic product fell 0.2% sequentially in the first quarter, reversing an upwardly revised 0.8% rise in the fourth quarter. Further, this was the first decline since the second quarter of 2025.
On the expenditure side, general government consumption decreased 7.6%, and gross fixed capital formation declined 2.3% mainly due to fewer investments in buildings and constructions. Net foreign demand negatively contributed to GDP by 0.1% as exports grew 2.2% amid a 2.5% growth in imports.
Meanwhile, household final consumption rose 0.6%, linked to more consumption of transportation and housing. Changes in inventories also contributed positively by 0.8%, led by industrial inventories.
The annual economic growth remained stable at 2%, revised from a 2.1% expansion seen in the flash report.
Separate official data showed that retail sales grew at a slower pace of 4.7% annually in April, after a 5.8% increase in March. Sales in consumables increased 2.2% from last year, while those of durables dropped 2.1%.
Monthly, retail sales remained flat in April versus a 2.9% rise in the prior month.
