Swedes cut back on TV purchases as retail sales fall the most since 1993
(Bloomberg) — Sweden’s retail sales fell in August from a year earlier at the fastest pace in nearly three decades, as consumers mainly cut spending on durable goods, raising concerns about a rapid cooling in the largest Nordic economy.
Retail trade decreased by 0.4% from July, the fourth monthly decrease in a row, Statistics Sweden said in a statement. The decline was 5.1% year-on-year, the biggest since June 1993 – a period when the country was still grappling with rising unemployment in the wake of a financial crisis that crippled the banking sector.
The data contribute to a gloomy picture as other parts of the Swedish economy, such as the housing market, are already suffering from the effect of accelerating inflation and rising borrowing costs. Concerns about potential fallout for the economy have been fueled after Sweden’s central bank announced a record interest rate hike last week, while several forecasters already see the economy shrinking next year.
According to a separate statement, Sweden’s consumer confidence fell more than economists expected this month to 49.7, also the lowest since 1993.
– Households are as gloomy as in the 90s and their plans for larger purchases have also cooled, says Swedbank’s analyst Maria Wallin Fredholm in a message to customers.
“With interest rates and inflation rising monthly, while households return to more normal consumption patterns, ie more service consumption, retail sales are expected to continue on this weaker trend,” the analyst said.
Retail sales of durable goods fell 9% from a year earlier, while sales of consumer goods excluding alcohol were flat, the office said.
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