No recession seen in inaugural Deloitte/SEB CFO survey of Sweden

The first joint report by Swedish bank SEB and accountant Deloitte into the Swedish economy predicts that the country will experience a slowdown but no recession this year.

From an annualised rate of 6.1% in 2010 and 3.9% in 2011, GDP growth contracted sharply from the fourth quarter of 2011 on, as weakness in key export markets started to hit the Swedish economy.

SEB predicts growth of just 0.5% in 2012, before rising to 1.7% in 2013. The joint Deloitte/SEB survey of Swedish CFOs also points to the Swedish CFO index, which only managed to edge up marginally to 50.5 in February from 49.2 in November 2011.

Still, other evidence, such as the purchasing managers index, points to an economy that is stronger than the headline slump in GDP growth in the fourth quarter of 2011 suggests, SEB and Deloitte said.

“The relatively stable performance of German exports, which have historically co-varied strongly with Swedish exports, also indicates that the fourth quarter decline exaggerates the underlying trend. SEB thus does not expect a new recession in Sweden but expects a degree of recovery early this year.”

The report warns of slowing consumption and rising unemployment, but the economy may gain support from the country’s central bank, which could still cut its repo rate further despite already indicating that it will leave rates unchanged until 2013.

Despite the poorer macroeconomic projections for Sweden, the CFOs surveyed indicated that they are somewhat more optimistic than when last surveyed in November.

None of them believe the climate is “very favourable”, but there has been a doubling in the number who view conditions as “favourable”.

To read the full report click here: CFO Survey Spring 2012


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