Sweden's Economic Confidence Falls To 42-Month Low

(RTTNews) - Sweden's economic confidence weakened in December to the lowest level in three-and-a-half years amid a gloomy construction sector environment, survey results published by the National Institute of Economic Research showed on Thursday.

The economic tendency index dropped to 84.3 in December from 84.9 in the previous month.

Further, this was the lowest score since June 2020, when it was 76.3.

The morale for the building and civil engineering industries worsened the most in December, falling to a 39-month low of 89.9 from 91.3.

A historically high proportion of construction firms reported decreased activity over the past three months, and their production plans have not been as pessimistic since 1996, the survey said.

The manufacturing confidence decreased to 95.1 from 99.1, which was the lowest since early in the pandemic in summer 2020. The decline was due primarily to a downturn in capital goods.

Meanwhile, the confidence indicator for the retail trade and service sector strengthened at the end of the fourth quarter.

The consumer confidence indicator improved to 74.5 from 73.2, as consumers were less negative about the outlook for the Swedish economy over the next 12 months.

The National Institute of Economic Research reported that the Swedish economy will grow slower at the start of 2024.

However, the labour market is expected to weaken, with unemployment reaching 8.5 percent next year, the report said.

Data revealed that inflation is decreasing and will be clearly below the Riksbank's inflation target by the second half of 2024.

Consequently, the Riksbank will initiate a series of interest rate cuts next summer, as indicated in the latest forecast.