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Sweden Retail Sales up 5% in April 2009
Jun 16, 2009

Retail sales in Sweden grew 5% year-on-year in April 2009 due to falling of the Easter in the same month, interest rates cuts and strong consumer confidence.

According to a preliminary report released by Statistics Sweden on May 28, 2009, the retail sales grew 5% year-on-year in April 2009 as compared to 2% decline in March 2009, as reported by Forextv.

The seasonally adjusted retail sales rose 3.5% month-on-month in April 2009 after declining 0.3% in March 2009, whereas economists were expecting a rise of 0.3%. The Swedish retail sales grew 1.3% during February-April 2009 against the previous period of three months.

A series of interest rate cuts that helped in removing gloom among households and encouraged people for shopping contributed significantly in scaling up the Swedish retail sales above expectations in April 2009. In addition, fine weather conditions in April also gave impetus to the spring shopping season.

Sweden is believed to be suffering from the worst recessions since 1940s. World’s second largest truck manufacturing company Volvo and many other manufacturers are shedding off their staff to offset the weak demand in the major export markets.

Given the continuous decline in demand, the central bank has cut interest rates by over 4 percentage points since the financial crisis started worsening in 2008. Consequently, the standard repo rate of the bank floated slightly above zero at 0.5%.

Economic indicators show that the country has been gradually shifting towards stabilization for the past few weeks. However the consumer confidence index is still low, but it crossed the expectation level in May and the industrial production has also exhibited probable signs of revival.

However, some industry experts have hinted that the resurgence in retail sales could be due to falling of Easter in April 2009 against March last year. They also believe that the current trend is not so strong and sales figure may decline. Despite gloomy outlook, indicators pointed towards improvement in the retail sales that fanned the hopes for better performance in future.

According to a Research Analyst at RNCOS, “The Swedish retail sales increased in April 2009, indicating that lower interest rates and tax cuts are boosting the spending of the Swedish households. Moreover, better prospects for the retail sales are expected in coming times as the improving economy will reduce the possibility of further job cuts.”

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