The Swedish economy saw a slight contraction, of 0.2%, in the first quarter this year, compared to the previous quarter, according to new data from Statistics Sweden (SCB).
Household consumption and inventory changes contributed positively to GDP growth during the quarter, while weaker government spending and lower investment activity weighed on performance, it noted.
On a year-on-year basis, however, Sweden’s economy grew by 2% in the first quarter of 2026, adjusted for calendar effects.
“GDP decreased slightly in the first quarter of the year, following large increases in central government expenditure in the preceding quarter,” commented SCB’s Jessica Engdahl.
Household consumption
Household consumption expenditure rose by 0.6% quarter-on-quarter, driven mainly by higher spending on transport and housing.
Public consumption expenditure declined by 2.1%, largely due to a 7.6% fall in central government consumption following elevated spending levels in the previous quarter. Consumption by municipalities and regional governments increased marginally by 0.1%.
Changes in inventories contributed positively to GDP growth, by 0.8 percentage points, with industrial inventories making the largest contribution.
Gross fixed capital formation fell by 2.3% during the quarter. SCB said the decline was primarily due to lower investment in buildings and construction projects. General government investment dropped by 9.6% after strong growth in the preceding quarter, while investment by market producers edged up by 0.2%.
Exports increased by 2.2% during the quarter, while imports rose by 2.5%, resulting in a small negative contribution from net exports to GDP growth.
Labour market
The labour market showed mixed results. The total number of employed persons increased by 0.1%, but the total number of hours worked across the economy fell by 0.3%. In the business sector, hours worked declined by 0.5%.
Labour productivity in the business sector increased by 0.3% during the quarter.
Elsewhere, household real disposable income increased by 1% compared with the first quarter of 2025.
Finally, public administration recorded a deficit of SEK 25.2 billion during the quarter, compared with a deficit of SEK 21.9 billion during the same period last year.
SCB also revised its full-year GDP estimate for 2024 upwards from 1% to 2% following the publication of detailed annual accounts. Read more here.
