1. The state of trade in Sweden
August 2011

2. Summary
The Swedish retail sector as a whole managed to whether the financial crisis well. Low interest rates were an important factor.
However, after an initial recovery in 2010, growth has been quite weaker than expected in the first half of 2011.
The economic uncertainty in the world in combination with rising interest rates makes future consumption uncertain.
Much depends on how economic policy will be performed to meet the new global situation. Will promised tax cuts go ahead? Contrariwise, will interest rates be raised at a lower pace?

3. Global uncertainty -Sweden best in class Budget deficit Debt / GDP
Ireland
-94 % 97
Greece
-27 %
143
Spain
-26 % 60
Great Britain
-25 % 80
Portugal
-22 % 93 EU
-14 % 85
France 82
Sweden
0 % 40
-Sweden best in class

4. Sweden’s future looking bright
Sweden out of recession
Stable public finances
Slight parlamental uncertainty
In particular: tax cuts?
Optimistic households
Billion SEK 2010
Prog.
2010
2011
2012
Household consumption
3,4
2,9
3,0
Public consumption
2,5
2,0
1,0
Gross investments
7,1
9,5
7,0
Lagerinvesteringar
21 384
2,1
0,5
0,0
Export
11,0
10,5
5,0
Import
12,8
6,0
BNP
5,7
4,9

5. Optimism among Swedish households very high

6. Reasonable development so far this year
Grocery: +1.3 %
Consumer durables: +2,4 %

7. Interest rates on their way up…
-Interest rates need to be doubled in order to achieve historic mean

8. Retailers’ confidence down
Retailers’ future confidence

9. Grocers’ more optimistic about future
Consumer durables

10. Prognosis Retail year 2011 so far weaker than expected.
The prognosis for the year 2011 is a growth of 1.5 percent for grocers’ and 3 percent for consumer durables.
The future development very much depends on economic policy. In particular, will promised taxz cuts go forward in view of the economic situation? In the other hand, will the Bank of Sweden refrain from raising interest rates for the same reason?