Filtered by Subscriptions: Nordic & Swiss Economics Use setting Nordic & Swiss Economics
Denmark’s lockdown pays off … According to the GDP indicator released on Friday, the Danish economy contracted by 7.4% q/q in Q2, broadly in line with our forecast. While this was its biggest decline since data began in the 1990s, it was a far cry from …
14th August 2020
Compared to many of the larger euro-zone countries, the coronavirus remains relatively well under control in the Nordic countries and Switzerland. With the exception of Denmark, there are at this stage no signs of a second wave. This in turn is helping to …
13th August 2020
The Norges Bank will almost certainly leave its key interest rate on hold at zero next Thursday (20 th August), and we expect it to reiterate that it is in no rush to tighten policy. Having cut its key policy interest rate to a record low of zero at its …
Sweden’s contrary policy response to the pandemic reduced the depth of its economic slump at the expense of worse public health outcomes. But the data so far suggest that its experience stands out less than one might have expected, both in terms of …
12th August 2020
Inflation to remain anchored at low levels Swedish headline inflation would have fallen further in July had it not been for temporary effects related to car rental prices. And while core inflation edged up from June, against a backdrop of falling resource …
Krone-driven boost to inflation to fade in early-2021 The lagged impact of exchange rate movements will ensure that inflation remains above the Norges Bank’s target throughout the second half of this year. However, this effect will fade in early-2021 and …
10th August 2020
Services activity takes a hit, despite no lockdown Given the wider interest in how Sweden’s economy performed under its light-touch lockdown, its preliminary estimate of Q2 GDP growth, released on Wednesday, was perhaps watched more closely-than usual. …
7th August 2020
Swedish economy not immune, but still well placed The sharp contraction in the Swedish economy in Q2 confirms that it has not been immune to Covid, despite the government’s well-documented light-touch lockdown. Nonetheless, the economic crunch over the …
5th August 2020
Swiss inflation likely to edge higher from here Inflation in Switzerland now appears to have troughed, but it is set to remain frustratingly weak over the coming years and a headache for the SNB. Meanwhile, the manufacturing PMIs from July suggest that …
3rd August 2020
Mixed messages from the retail data Retail sales data from Switzerland for June, released this morning, show that consumer spending lost a bit of steam at the end of Q2 following the initial sugar-rush as restrictions were eased. Having surged by almost …
31st July 2020
Barometer suggests recovery continued at start of Q3 While the flare-up in cases in Europe is a key downside risk, the sharp increase in the KOF Economic Barometer in July suggests that the Swiss economy continued to bounce back at the start of Q3. The …
30th July 2020
Recovery continues apace The rise in Sweden’s Economic Tendency Indicator (ETI) in July suggests the recovery there continued to gather pace at the start of Q3. That said, the rise in consumption appears to be slowing, and the external sector would suffer …
29th July 2020
Nordic economies comparatively well placed In case you missed it, we published our Nordic & Swiss Economics Outlook this week. (See here .) The key message is that we forecast the Nordic economies to experience the shallowest recessions in Europe, and our …
24th July 2020
The Nordic economies have weathered the Covid crisis comparatively well, and if our above-consensus forecasts for GDP growth this year prove accurate, the region will see some of the smallest falls in output in the whole of Europe. We forecast output in …
21st July 2020
“SNB 101” speech targeted at the US Treasury Thomas Jordan delivered the first-ever virtual IMF Central Banking Lecture on Tuesday, which is named in honour of Michel Camdessus, the longest- serving past IMF Managing Director. The video production had a …
17th July 2020
Inflation set to stay stubbornly low The pick-up in Swedish inflation in June was a bit larger than expected but it was driven mainly by energy effects and is not a game changer. And while core inflation also edged up from May, against a backdrop of …
14th July 2020
The various high-frequency data series that we have been following in our Recovery Trackers have indicated that activity in the Nordic economies has picked up sharply over the past three months. However, the release of monthly GDP data from Norway for May …
13th July 2020
Nordic economies have weathered Covid well May’s 2.4% m/m rise in mainland GDP in Norway would normally be enough to make you fall of your chair, but it was actually a bit underwhelming given the rapid rebound in our Recovery Tracker since lockdown …
10th July 2020
Krone-driven boost to inflation to peak in H2 Previous falls in the krone will ensure that inflation stays above the Norges Bank’s target throughout H2. Nonetheless, this effect will fade in early-2021 and policymakers will be in no rush to raise interest …
The pick-up in mainland Norwegian GDP in May was a tad underwhelming, with the economy’s recovery now seeming to follow a shallow “U” rather than the deep “V” seen in the euro-zone. Nonetheless, the total loss of output this year is set to be much smaller …
8th July 2020
Nordics gathered momentum into H2 The June PMI surveys from the Nordics, released this week, add to the evidence that the region’s economies are further down the road to recovery than others in Europe. In Sweden, there was plenty to be encouraged by in …
3rd July 2020
Switzerland set for a prolonged period of deflation The lack of price pressures in Switzerland is nothing new, but will ensure that the SNB remains poised to combat bouts of upward pressure on the franc for the foreseeable future. The headline inflation …
2nd July 2020
The Riksbank has put its money where its mouth is when it comes to expanding its balance sheet, but in our view all roads still lead to a return to negative interest rates, either in late-2020 or early-2021. While the Riksbank’s decision to leave the repo …
1st July 2020
Swiss manufacturing struggling to shake off crisis The manufacturing PMIs from June add to the evidence that activity in Sweden and Norway has recovered comparatively quickly, but suggest that Swiss manufacturing is taking longer to find its feet. The …
Barometer underwhelms but retail sales bounce back The underwhelming increase in the KOF Economic Barometer in June is at odds with the chunky rise in the euro-zone PMIs. Nonetheless, the surge in Swiss retail sales in May shows that the economy has …
30th June 2020
It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government policies, many economies should be able more or less to …
29th June 2020
Nordic consumers splash the ‘cash’ Retail sales data for May released this week show that consumers in the Nordics have splashed the cash since lockdowns have been eased (figuratively speaking, of course, given that cash usage is increasingly rare in …
26th June 2020
While we still expect the Riksbank to cut its repo rate back into negative territory later this year, it is set to keep its powder dry at its policy announcement next Wednesday (1 st July). Recall that the Riksbank left its repo rate unchanged at zero …
24th June 2020
Shallower downturns forecast in the Nordics Amid increasing signs that the Nordic economies have weathered the Covid crisis better than most (see here ) we have upgraded our forecasts for GDP growth over the coming years. (See Table ) As flagged in an …
19th June 2020
This morning’s decisions by the SNB and the Norges Bank to leave interest rates on hold at -0.75% and zero respectively were never really in doubt. Both banks are set to leave policy unchanged throughout our forecast horizon and, in the case of the SNB, …
18th June 2020
There are increasing signs that the Swedish economy has weathered the crisis better than we first feared. Accordingly, we now expect GDP to contract by ‘only’ 2.5% this year (previously -7.5%). It has been evident for some time that Sweden’s economy would …
16th June 2020
The latest high frequency data indicate that economic activity in the Nordic economies has continued to recover in recent weeks, with trips to shops and restaurants now close to pre-crisis levels in Sweden, Denmark, and Norway. (See Chart 1.) Sweden’s …
12th June 2020
Sweden is getting off comparatively lightly The 11% peak-to-trough drop in Swedish household consumption between February and April puts paid to any notion that Sweden has escaped unscathed following its light-touch lockdown. Nonetheless, as grim as they …
The Swiss National Bank and the Norges Bank are all but certain to leave their policy settings unchanged at the scheduled announcements next Thursday (18 th June) and for the foreseeable future. Recall that the SNB left interest rates on hold at -0.75% at …
11th June 2020
Pick-up in Swedish inflation not a game changer The rise in Swedish inflation in May ties in with signs that the economy has got off comparatively lightly by virtue of its light-touch lockdown. That said, the May figure was skewed in part by temporary …
Currency-driven inflation boost to fade in H2 Recent falls in the krone contributed to the pick-up in core inflation in Norway in May, but this effect is likely to fade in H2. Accordingly, the Norges Bank will be in no rush to tighten monetary policy. The …
10th June 2020
SNB breathes a sigh of relief as the franc slides The positive policy moves out of Europe – including the ECB’s decision yesterday to increase the size and duration of its Pandemic Emergency Purchase Programme – have reinforced the sense that policymakers …
5th June 2020
Swiss deflation here to stay; Sweden set to outperform The further decline in Swiss inflation in May came as no surprise, but April’s private sector production data from Sweden add to signs that the economy has reaped some benefit from its light-touch …
4th June 2020
A big fall in output, but Switzerland is comparatively well placed The sharp fall in Swiss GDP is Q1 was in line with the general pattern seen in other countries, and Q2 is set to be much worse. However, now that lockdown restrictions have been eased, we …
3rd June 2020
The gradual recovery is underway The partial recoveries in the manufacturing PMIs in May offer encouragement that activity is recovering now that lockdowns have been eased. (See Chart 1.) The small pick-up in the Swiss manufacturing PMI in May, from 40.7 …
2nd June 2020
Skingsley leaves the door open to a repo rate cut This morning’s upward revision to Swedish Q1 GDP, from the initial estimate of -0.3% to +0.1%, adds to the evidence that the country has enjoyed some economic benefit from its light-touch lockdown. That …
29th May 2020
While Sweden’s economy has fared better than the worst-affected countries, as a result of its comparatively light-touch lockdown, it is still set for a year to forget. We expect the decline in GDP this year as a whole to be in a similar ballpark to that …
28th May 2020
The prospect of a joint European fiscal response has helped to ease upward pressure on the Swiss franc and means that there is light at the end of the tunnel for the SNB following its recent bout of FX interventions. While monetary policy will remain …
Sweden faces some time out in the cold Norway, Denmark and Finland are reportedly considering keeping their borders with Sweden closed, even as and when they open them to others, because of the higher prevalence of Covid-19 infections there following its …
22nd May 2020
Economic activity in Denmark appears to have clawed back about one-third of its virus-related fall since the government started to ease restrictions in mid-April, with activity probably about 7.5% below ‘normal’ levels. At face value, the Danish …
21st May 2020
Yet another iteration of the Norwegian Budget The publication of a revised 2020 budget by the Norwegian government on Tuesday raised a couple of points worth noting. First, the government’s forecast of a 4% fall in mainland GDP this year is on the …
15th May 2020
The estimates of Q1 GDP that have been released so far have been subject to all manner of health warnings and are liable to be revised, potentially significantly, over the coming quarters. Nonetheless, there is a clear relationship between the severity …
14th May 2020
Falling core inflation increases pressure on the Riksbank While the Riksbank will look through the energy-driven plunge in headline inflation in April, the further fall in underlying price pressures will be harder to ignore. All told, while policymakers’ …
13th May 2020
Norges Bank to look through pick-up in core inflation The food-driven jump in the core inflation rate in Norway in April will not trouble the Norges Bank. With the economy facing a slow recovery, a prolonged period of record low interest rates is on the …
11th May 2020
Limited solace from Sweden’s light-touch lockdown This week provided mixed messages on the health of the Swedish economy. On a positive note, there were welcome signs that the country has reaped some benefit from its light-touch lockdown – at least from a …
7th May 2020
