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Imports rise more rapidly than exports

24
Mar '08

GDP growth was 2.6 percent in 2007, the slowest since 2003. Rising interest rates and rising prices of raw materials and energy have led to signs of increasing inflation in 2007. The inflation rate was 3.5 percent in December while the underlying inflation according to CPIX was 2.0 percent.

During the fourth quarter of 2007 the unadjusted GDP growth was 2.2 percent while the calendar adjusted growth was 2.8 percent. Economic growth in Sweden has slowed down rather significantly during the last year after the growth of 4.1 percent in 2006.

At the same time the increased global demand that has caused rising prices on energy and raw materials has contributed to rising prices for consumers. The inflation rate was 3.1 percent in February. The largest part of the price increase, 1.1 percentage points, was caused by increased interest charges while the contribution from higher food prices was 0.7 percentage points and rising prices for fuel 0.6 percentage points.

Dring the fourth quarter growth was mainly powered by domestic demand. Household consumption as well as gross capital formation contributed by about 1.5 percentage points to GDP growth. At the same time the consequence of increased domestic demand was that imports of goods rose considerably faster than exports of goods. As a result net exports held back GDP growth by 1.2 percentage points.

A calculation of the contributions to GDP growth, where the different components on the expenditure side have been adjusted for their import contents shows that exports, in spite of rather poor development during 2007, are very important for the Swedish economy. During 2007 exports, adjusted for import contents, contributed to 1.1 percentage points of GDP growth, which is a larger share than any other component.

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