Retail sales plummet in Sweden — RT Business News
Inflation and soaring loan costs weighed on private spending, official report says
Retail sales in Sweden fell the most on record last month as inflation and soaring borrowing costs continued to weigh on consumers’ purchasing power.
In February, retail sales in the Nordic region’s biggest economy fell 9.4% from the same period last year, led by a decline in durable goods, which recorded the biggest drop sales since 1992, Statistics Sweden reported on Wednesday.
Economists attribute these weak results to the continuing pressure on real disposable incomes and household purchasing power, caused by the highest inflation in 30 years and the continuation of interest rate hikes by the Swedish central bank.
“The current inflation spurt is clearly putting the retail sector under increasing pressure,” Nordea economist Gustav Helgesson wrote in a note. “Parts of the retail sector are already in recession. Today’s report reinforces our view that private consumption will contract this year,” he added.
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Sweden is going through one of the worst economic downturns in modern history, with one of the highest inflation rates in Europe and the highest outside Eastern Europe, economists say.
The country has also seen a drastic drop in the real estate sector, with house prices plunging to their lowest level in years, while consumer spending has plummeted due to the cost of living crisis.
Sweden’s 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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