Swedish PPI Slows In August

Sep 25, 2007 - The Swedish producer price index rose 4.2% year-on-year in August to 140.4, the Statistics Sweden said Tuesday. This compared to an increase of 5.5% seen in July. Economists expected an annual increase of 4.9% for the month of August.

On a monthly basis, the index declined 0.4% in August, after rising 0.4% in July. Economists expected a monthly rise of 0.2% for the month of August. The monthly decline was due to lower prices of iron, steel and ferro-alloys, mining and quarrying, chemicals and chemical products, motor vehicles and machinery, excluding computers.

Swedish import prices dropped 2.6% in August from the previous month, which was mainly due to lower prices of crude oil.. This compared to the growth of 1.4% in July. Annually, import prices slipped 0.1%, after an increase of 3.9% in July.

Swedish August Trade Surplus Shrinks

Sep 25, 2007 - Swedish exports rose 3.0% to SEK85.0 billion in August, from last year, while imports climbed 13% to SEK84.4 billion, the Statistics Sweden said Tuesday. The net trade surplus came in at SEK0.6 billion in August compared to the trade surplus of SEK8.1 billion a year ago.

On a seasonally adjusted basis, the net trade surplus amounted to SEK6.5 billion in August, down from SEK7.3 billion in July.

Trade with the Non-EU member states fetched a surplus of SEK6.5 billion, while the trade with the EU member states resulted in a deficit of SEK5.9 billion in August.

During eight months ended August, the value of exports rose 5.0% SEK738.3 billion from last year. Meanwhile, the value of imports gained 10.0% to SEK657.1 billion. This resulted in the net trade surplus of SEK81.2 billion for the period January-August. During the same period last year, the net trade surplus amounted to SEK104.4 billion.

Sweden's Riksbank Raises Repo Rates

Sep 7, 2007 - The Sweden's Central Bank, the Riksbank, decided to increase its repo rate by 25 percentage points to a rate of 3.75%, the Executive Board announced, Friday. The Bank also said that the rate would be hiked further to contain inflation to the target rate of 2% by next year, while helping the economy grow in a balanced manner. The Bank's decision was based on the June Monetary Policy Report.

The Swedish economy grew stronger than expected in the second quarter, the Riksbank said. The labor market had become tighter and lending had increased, while house prices had risen. Cost pressures had built up, as productivity growth was less than expected in the second quarter. Food prices had increased more than anticipated, while companies and households had revised their inflation expectations upwards for the coming year, the Bank observed.

The Bank also took note of the general increase in uncertainty and unwillingness to invest, due to the turmoil in the financial markets engendered by the problems in the US sub-prime market. The unrest in the financial markets was expected dampen economic growth.Thus by increasing the repo rate 0.25%, the Bank hoped to balance the need to rein in inflation, with the need to sustain production and employment growth.

Future changes in the interest rate would depend on the growth of the economy and inflationary pressures. “The future direction for monetary policy will depend on how new information on economic developments abroad and at home will affect the prospects for economic activity and inflation in Sweden,” the Executive Board said.

A separate report by the Handelsbanken Capital Markets said that Swedish interest rates would rise to 5.5% over two years. It predicted that the Swedish economy would grow 3.7% in 2007, followed by a 3.2% growth in 2008.

Swedish Central Govt. Surplus At SEK9.6 Bln In August

Sep 7, 2007 - The Swedish central government reported a surplus of SEK9.654 billion in August as a result of central government payments, indicating a negative borrowing requirement of SEK9.584 billion, the Swedish National Debt Office or SNDO said Friday. This compares to a SEK4.928 billion borrowing requirement reported in the previous year.

The SNDO expect a borrowing requirement of SEK 0.9 billion.

The SNDO report said, “The deviation is mainly explained by tax income being approximately SEK6 billion larger than expected. In addition, the Premium Pension Authority has made a deposit of SEK 4 billion in their account at the Debt Office.”

Interest payments on central government debt were SEK 7.1 billion in August, which is SEK 0.6 billion higher than expected. The borrowing requirement for the twelve-month period to the end of August was minus SEK105.5 billion.

The central government debt came in at SEK 1,173 billion at the end of August.

Swedish Q2 GDP up 1.0 pct from Q1; up 3.6 pct year-on-year

Aug 2, 2007 - Sweden's calendar-adjusted GDP rose by 3.6 pct during the second quarter compared to a year earlier, Statistics Sweden (SCB) reported.

Compared to the first quarter of 2006, the seasonally adjusted GDP grew by 1.0 pct.

Market expectations were for a quarterly rise of 0.7 pct and an annual increase of 3.2 pct, according to SME Direkt.

Household consumption and gross fixed capital formation made the highest contributions to GDP growth, SCB said.

Gross fixed capital formation was up 9.2 pct year-on year, while household consumption expenditures increased 2.5 pct.

Exports increased 5.9 pct and imports rose 7.8 pct, while general government expenditures increased 1.9 pct.

Total employment, measured as the number of hours worked, was up 4.0 pct on year.