Stockholm | EcoPulse24

GDP Growth Continues for a Third Consecutive Month

Sweden's economy continued to strengthen in May 2026, with gross domestic product (GDP) rising 0.9% month-on-month, following an upwardly revised 0.6% increase in April. The latest reading marked the third consecutive month of economic expansion, underscoring the resilience of the country's economy despite mixed signals across domestic demand.

On an annual basis, Sweden's economy grew 3.9%, accelerating from a revised 2.6% increase in April.

According to Statistics Sweden, the expansion was primarily driven by stronger output from service-producing industries, particularly the information and communication sector, while stronger net exports - largely reflecting lower goods imports - also supported overall growth.

Inflation Moderates in June

Sweden's inflation eased slightly in June, with consumer prices rising 0.7% year-on-year, down from 0.8% in May and in line with market expectations.

Statistics Sweden attributed the softer inflation mainly to lower food prices and transport costs.

The Riksbank's preferred inflation gauge, the Consumer Price Index with Fixed Interest Rate (CPIF), rose 1.3% annually, easing from 1.5% in May while remaining slightly above economists' expectations of 1.2%.

On a monthly basis, consumer prices increased 0.4%, slowing from 1.0% in the previous month.

Industrial Production Remains Strong

Sweden's industrial sector continued to deliver solid performance during May.

Industrial production increased 6.9% year-on-year, matching April's revised growth rate and marking the strongest annual expansion since September 2025.

Manufacturing output rose 7.0%, supported by robust production of:

• Chemicals and pharmaceutical products (+14.4%)

• Computer, electronic and optical products (+11.1%)

• Electrical equipment (+3.4%)

Mining activity also strengthened significantly, with production rising 9.1%, accelerating sharply from 1.6% in April.

On a monthly basis, industrial output edged 0.2% higher after a strong 4.2% increase in April.

Factory Orders Signal Slower Momentum Ahead

Despite resilient production, incoming industrial orders pointed to a moderation in future manufacturing activity.

Total factory orders increased 1.3% year-on-year in May, slowing from 4.8% in April.

Domestic orders declined 1.4%, while export orders slowed to 3.0% from 7.0% a month earlier.

On a seasonally adjusted monthly basis, total orders fell 3.2%, reversing April's 3.9% increase.

The slowdown was most visible in capital goods, energy-related products and durable consumer goods, although non-durable consumer goods continued to post double-digit growth.

Household Spending Weakens

Consumer spending remained the weakest part of Sweden's economic picture.

Household consumption slipped 0.1% month-on-month in May following a 0.7% decline in April.

Lower spending on healthcare, transport, household equipment, alcoholic beverages and personal care offset gains in food purchases, housing-related spending, clothing and footwear, and restaurants and accommodation services.

Despite the monthly decline, household consumption was still 2.1% higher than a year earlier, indicating that consumer demand continues to recover gradually over the longer term.

Reference Table - Sweden Macro Snapshot

Reference Table - Economic Signals

Reference Table - Key Sector Performance

EcoPulse24 Analysis

Sweden's latest economic data present the picture of an economy that continues to expand but with increasingly uneven momentum.

Economic growth remains supported by strong service-sector activity, resilient industrial production and an improvement in net exports. However, softer household spending and slowing factory orders suggest that domestic demand is becoming less supportive of growth.

The easing of inflation to 0.7%, together with a 1.3% reading for the Riksbank's preferred CPIF measure, indicates that price pressures remain well contained and below the central bank's long-term target. This could provide policymakers with greater flexibility should economic momentum weaken later in the year.

Overall, the data point to an economy that is still growing at a healthy pace, but one increasingly dependent on exports and business activity rather than broad-based consumer spending. Investors will now watch whether household demand stabilizes in the coming months and whether softer factory orders translate into slower industrial output during the second half of 2026.