Latest news with #Riksbank
Local Sweden
5 hours ago
- Business
- Local Sweden
Swedish households 501 billion kronor worse off – and Trump's to blame
Swedish household capital saw a cut of 501 billion kronor in value in the first quarter of this year, new figures from the SEB bank have revealed, due in part to American trade policy. Advertisement The Riksbank central bank has spent the past year gradually cutting the policy rate, which, combined with a tax cut at the beginning of the year, means that household buying power has risen. Despite this, household consumption remained unchanged in the first quarter of this year, which SEB private economist Américo Fernández believes is due to American politics. 'We saw a dip in trust as early as after the US election in November 2024, where it became clear that American foreign policy was about to change. And as we suspected, the first quarter of the year was dominated by insecurity surrounding American trade and security policy,' Fernández wrote in a press statement. This in turn has caused increased market turbulence, cutting 501 billion kronor or 1.7 percent from Swedish household capital. Compared to a year ago, household capital has risen in value by 2.2 percent, which is well under the 7.4 percent average seen over the past decade. Property and stocks included in this figure, with all types of assets losing value. Stocks saw the greatest fall, with international stocks particularly affected. Advertisement "Households tend to have a high exposure to global stocks in their savings and during the quarter the broader American market dropped by almost five percent. Add to that the fact that the krona strengthened against the dollar and the market fell by around 15 percent," Fernández said. At the same time, households' combined debt grew by 34 million kronor, primarily as a result of mortgages and student loans, while consumer loans fell. Study loans in particular grew by 7.7 percent year on year, their largest increase in 24 years and well above the 2.7 percent average over the last decade. 'Household debt behaviour is strengthening the picture of a long, drawn out period of low growth,' Fernández said. 'Mortgage debt increasing at a low rate combined with shrinking consumer loans suggests that households' appetite for risk is still low. In addition, student debt seeing the fastest annual increase in 24 years is a sign of a continued tight and cautious labour market,' he added.
Local Sweden
7 hours ago
- Business
- Local Sweden
What's the latest on Swedish property prices?
Swedish property prices saw a modest increase in May. Why was that, and what could make them rise in the future? Advertisement Are property prices rising or falling? Rising, but not by much. In May, prices for apartments or bostadsrätter rose by just 0.1 percent compared to the previous month, while detached houses or villor saw a slightly higher increase of 0.5 percent. That's according to figures from estate agent organisation Svensk Mäklarstatistik. The number of houses sold increased by five percent when compared to May last year, with around 6,300 villor selling last month. Roughly 9,800 apartments changed hands, which was a decrease of eight percent when compared to May 2024. The average price for a detached house last month also varied wildly. In greater Stockholm a villa cost an average of 7.6 million last month, while you would have saved two million kronor by buying in greater Gothenburg (5.6 million) or greater Malmö (5.4 million). The figures for May roughly follow the trend for the spring so far, with prices rising marginally each month. Where there any regional differences? Yes. In both the greater Stockholm area and in central Stockholm, prices for apartments were essentially unchanged in May. In the greater Gothenburg area they saw a 0.5 percent increase, with central Gothenburg, greater Malmö and central Malmö all seeing a rise of almost 1 percent. There were also regional differences in house prices. Greater Stockholm and greater Malmö both saw increases of around 0.5 percent, with prices in Gothenburg remaining unchanged. Advertisement Why haven't prices gone up more? According to the group's CEO Oskar Öholm, who described the figures for May as 'a cautious upturn,' the modest price increases reflect buyer psychology more than a fundamental issue with the housing market. He identified two major factors as geopolitical instability, as well as record-high supply of properties up for sale. "In a situation with geopolitical instability and high supply, uncertainty weighs heavily." What could make prices rise? The Riksbank, Sweden's central bank, is due to make an announcement on the key interest rate later this month. It's not yet clear if they will decide to keep it the same at 2.25 percent, where it has been since February, or cut it, perhaps by 0.25 percentage points to 2 percent. A number of experts from major Swedish banks are predicting that the Riksbank will cut the rate on June 18th, including experts from Nordea, Handelsbanken, Länsförsäkringar, Swedbank and Danske Bank. Advertisement If the central bank does cut the rate in June, mortgage rates would follow, which in turn would lead to higher property prices. There is another key interest rate announcement scheduled for August. How many properties are on sale? Last month, Swedish property site Hemnet recorded its highest ever number of property ads – 82,071, or an increase of 14 percent compared to the same time last year. That's also the first time the site has had more than 80,000 active ads at once. The high number of ads is widespread across the country, with 15 of 21 counties seeing individual monthly records in May. According to Hemnet market analyst Erik Holmberg, the reason for the high number of ads is partly due to the fact that properties are taking a long time to sell. 'Pricewise, the market is stable, but it's characterised by long waiting times, which has resulted in the time to sell increasing and record-high supply,' he wrote in a press statement. The Västerbotten region saw the largest increase in the number of properties on sale, up 45 percent on last year, which, Holmberg said, is probably linked to battery factory Northvolt's recent bankruptcy. 'These developments are probably related to the instability which has occurred in the Skellefteå property market after reports of economic problems related to the Northvolt factory,' he said.
Local Sweden
2 days ago
- Business
- Local Sweden
Swedish companies aren't feeling confident about hiring more staff in the year ahead
Swedish businesses remain pessimistic about their hiring prospects in the near future, with only one in four believing they will have more employees within a year, a survey suggests. Advertisement The economic downturn and continued uncertainty about United States President Donald Trump's postponed trade tariffs are still causing concern among Swedish businesses. The Confederation of Swedish Enterprise (Svenskt Näringsliv) quizzed nearly 6,000 companies on their views on the current situation as part of their business panel. When asked whether they think their staff will increase over the next year, six out of ten companies still believe they will remain unchanged, and one in ten believe they will have fewer employees – unchanged from the previous survey in the first quarter of the year. And when it comes to investments, 52 percent assess the situation as unchanged. The Confederation of Swedish Enterprise also predicts that Sweden's Riksbank will decide to lower the key interest rate this week, followed by another cut after the summer.
CNBC
5 days ago
- Business
- CNBC
Sweden is feeling the heat from Trump tariffs — and there's more to come
Sweden's economy and households are feeling the heat from U.S. trade tariffs, the Scandinavian country's finance minister told CNBC — before the full force of the levies has even come into play. "Our economy and the public finance are very solid. We have a low debt and we can cope with quite a lot. But eight of 10 Swedes save or invest their money in funds, stock markets and so on. So when ... the market has gone up and down, that has been costly for households," Finance Minister Elisabeth Svantesson told CNBC Tuesday. "[U.S. President Donald] Trump is really playing a high stakes here, and it's a game with no winners, really, and it's costly for households, and that makes me sad," she added. Uncertainty around the U.S.' trade policy has left its mark on Swedish and international financial markets. Sweden's central bank, the Riksbank, noted last week that the sharp shifts in U.S. trade and security policy were causing "substantial market movements during the spring and entail greater uncertainty than usual." Other signs have emerged that the threat of tariffs is affecting the wider Swedish economy, with government data released last week showing the economy shrank 0.2% in the three months to March, on a quarterly basis. Sweden's finance ministry revised its 2025 and 2026 growth forecasts downwards last month, predicting a 1.8% expansion this year and 2.3% next year, saying tariffs and uncertainty are dampening the country's growth prospects. "We don't know whether tariffs will end, but the uncertainty and the unpredictability — that hurts our economy," Svantesson told CNBC. Market volatility is having a significant effect on savers in Sweden, a country renowned for its high level of household savings in investment funds among its 10.5 million population. The nation has actively encouraged retail savings in capital markets for decades, enabling citizens to invest in shares and investment funds and making the practice far more commonplace than in other European countries, like the U.K. Assessing the distribution and demographics of savers in Sweden, financial watchdog Finansinspektionen noted in March that savers on the younger and older ends of the spectrum tend to put their money into savings accounts. A larger portion of new savings for middle-aged Swedes is in shares and investment funds, ranging from pension schemes and fixed-income to sustainable and technology-focused funds. Swedish households held liquid financial savings — assets in bank accounts, funds, shares or other savings that generate a cash return — totaling 268 billion Swedish kronor ($27.8 billion) in 2024, with 138 billion Swedish kronor ($14.3 billion) held in investment funds, Sweden's statistics agency said in March, with the average Swede saving around 1,000 Swedish kronor every month in such funds last year. At the end of the first quarter of 2025, the total fund assets in Swedish investment funds amounted to 7.75 trillion Swedish kronor, according to the latest data from Sweden's statistics body. "Eight out of every ten Swedes save in funds, and if mandatory premium pension savings are included, we are all fund savers," the Swedish Investment Fund Association (Fondbolagens förening) — which aims to promote and protect confidence in funds as a savings format — says on its website, describing the country as a "world leader in fund saving." Trump's announcement in April that he would impose import tariffs on a wide range of trading partners, friend and foe alike, has proven a major source of market and economic uncertainty, and it's making some Swedish fund savers nervous, the association told CNBC. "Swedish fund savers are used to equity investments going up and down in the short run and have a long investment horizon," Fredrik Pettersson, chief analyst at Fondbolagens förening, told CNBC Wednesday. "Having said that, in our statistics we can see that in the beginning of this year, until now, active fund savers have sold U.S. funds, and bought European and Swedish funds," he noted. Morten Lund, Scandinavia chief economist at JPMorgan, told CNBC on Wednesday that Trump tariffs are " having a pretty clear impact on household sentiment" and that this could feed into the wider economy. "So what we can see is that household confidence has moved around the U.S. election, from being the highest across the developed markets to now it's actually plummeted to being the lowest. So it's been a pretty significant shock, and I think it's fair to say that this is very much related to tariffs uncertainty," he said. Low household confidence could filter through to consumption, Lund said, judging from the latest growth data. "We do think that there will be a hit. We did get the first GDP numbers from the first quarter, they declined, and that was a clear disappointment, and based on where the confidence numbers are now, we should also see a pretty weak number here in the current quarter," Lund noted. Sweden is an export-dependent country: exports amounted to around 55% of the national gross domestic product (GDP) in 2024, according to the country's central bank, making its wider economy vulnerable to tariffs imposed on the EU by President Trump. The move — and tariffs on other trading partners — was predicated on what Trump sees as unfair trading practices by the bloc, which it denies, and persistent trade deficits that the U.S. runs with the EU. Trump initially imposed 20% duties on the EU as part of his sweeping "reciprocal tariffs" announced in early April, before slashing the rate to 10% for 90 days on April 9 to give time for both sides to negotiate new trading terms. The EU and U.S. have been locked in talks to try to reach a trade deal, but Trump said in late May that he was recommending a straight 50% duty on goods coming from the bloc amid stalling negotiations. European Commission President Ursula von der Leyen managed to persuade the president to give talks more time but, as things stand, the EU has until July 9 to reach a deal with Washington. Sweden's largest exports to the U.S. are autos, machinery, pharmaceuticals, paper products and iron, steel — which is now subject to a 50% U.S. import tariff — and iron ore. Most Swedish exports go to other Nordic or European countries, but the U.S. is the third largest single exporting country, the Riksbank notes. "Of course, we are very dependent on exports," Sweden's finance minister told CNBC's "Europe early Edition." "With this uncertainty, companies are holding back, waiting for investments, because they don't know what will happen. Will the tariff be 10 or 20%, or something else?" she asked.
Reuters
5 days ago
- Business
- Reuters
Swedish flash inflation below forecast, strengthens rate cut hopes
STOCKHOLM, June 5 (Reuters) - Swedish inflation came in below forecasts in May, flash figures showed on Thursday, raising hopes that the central bank will cut interest rates in the coming months as the economy slows. Swedish headline consumer prices rose 0.1% in May from the previous month and were up 2.3% from the same month a year earlier, the statistics office (SCB) said. Excluding volatile energy prices - a measure the Riksbank is looking closely at currently - inflation was 2.5% on the year and 0.2% on the month. The Riksbank targets 2% headline inflation. "Our forecast is that the Riksbank will stay on hold at 2.25% in June, but the surprisingly low inflation and sluggish GDP growth increases the probability for a rate cut," Nordea economist Torbjorn Isaksson said. The central bank will publish its next monetary policy decision on June 18. In May it held its key rate unchanged at 2.25%, but said lower growth this year could open the door to a cut, assuming that the outlook for inflation remains benign. The economy shrank in the first quarter as uncertainty around U.S. tariffs hit business investment and household spending. The government expects GPD growth of 1.8% this year. Analysts in a Reuters poll had forecast headline inflation of 2.5% on an annual basis and 0.3% compared to the previous month. Ex-energy inflation was seen at 2.6% and 0.3% respectively. Headline inflation was 2.3% in April compared to the same month a year earlier and 0.2% against March. Stripping out energy, inflation was 3.1% in April on the year and 0.5% on the month.
