Economic growth decelerates in the fourth quarter of 2025

Q4 GDP growth revised upward: Sweden's GDP growth was upwardly revised to 0.5% in Q4 2025 on a seasonally adjusted quarter-on-quarter basis from an initial estimate of 0.2%, marginally exceeding market expectations. This followed a downwardly revised 0.8% expansion in the prior quarter. On a calendar-adjusted year-on-year basis, economic output grew 2.0% in Q4, following 2.5% growth in the previous quarter. In 2025 as a whole, the economy expanded 1.8%, marking a four-year high (2024: +1.0%).

External sector drives the slowdown: Compared to the previous quarter's data, readings in Q4 worsened for exports of goods and services (-1.2% on a quarter-on-quarter seasonally adjusted basis vs +1.1% in Q3) and imports of goods and services (0.0% vs +0.1% in Q3). In contrast, readings picked up for government consumption (+2.3% vs +0.2% in Q3) and fixed investment (+2.9% vs +0.8% in Q3). Finally, the variation in private consumption was the same as in the prior quarter (+0.9% in Q4 and Q3).

GDP growth seen at five-year high in 2026: Our Consensus is for sequential GDP growth to broadly stabilize in the coming quarters. That said, the economy is seen expanding at the fastest rate in five years in 2026 as a whole. The acceleration will be driven by stronger domestic demand amid real income gains, past monetary policy loosening and fiscal stimulus. Less positively, the external sector will act as a drag; exporters will face headwinds from U.S. tariffs, Chinese competition and policy uncertainty. The ongoing conflict in the Middle East is key to monitor considering its effects on energy prices due to the prolonged closure of the Strait of Hormuz.

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