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The Swedish economy

Statistical perspective

From the contents: Economic crunch boosts household savings..... page 3

The gross domestic product (GDP) for the fourth quarter of 2008 showed the largest decrease since the first quarter of 1993. Both exports and imports developed very unfavourably. The drop in household consumption coupled with the continued increase of disposable income resulted in record high household savings.

......which cut Swedish GDP growth

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Households’ disposable income developed positively last year. Nevertheless household consumption fell, resulting in an all-time high (since the 1960s) savings ratio. A remarkable increase occurred during the fourth quarter of 2008 compared to the corresponding quarter one year earlier. The savings increase corresponds to a considerably lower consumption demand, thereby contributing to the fall of GDP by about one percentage point.

Statistics suggest a relatively well-functioning credit market

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The financial crisis developed very quickly into a real economic crisis which almost immediately had an impact on demand, investment and growth. The drop in Swedish GDP is an expression of this. Paradoxically, however, the crisis is not reflected as clearly in the financial statistics. At an aggregate level, the effects on banks and corporate balance sheets are so far relatively small.

Number 1•2009
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Table of contents
Summary.................................................................. 3 International outlook. ................................................ 4 Exports and imports.................................................. 5 Household savings.................................................... 7 Household consumption........................................... 9 Government consumption...................................... 11 Gross capital formation........................................... 12 The business sector................................................. 15 Labour market. ........................................................ 17 Financial crisis as seen in statistics.......................... 20

The Swedish economy – published March 2009 

Exports decreased by a full 10 percent compared to the fourth quarter of 2007. during the whole period for which quarterly figures are available on foreign trade in the national accounts.2 percent. the drop in consumption as well as an increase of real household disposable income of slightly more than 1 percent resulted in an extremely high household savings rate of 7.4 percent of disposable income. Compared to the third quarter. However. Exports of cars contributed the most to the decline. Household savings rate 8 6 4 2 0 -2 -4 -6 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 Data up to and including 2008 Source: National accounts Percentage of disposable income. the lower production level led to much smaller stocks of work in progress compared to the fourth quarter of 2007. GDP fell by 0. This has affected the Swedish exports especially strongly. the decline of the seasonally adjusted GDP the fourth quarter was 2. However. the figure for the entire year is less informative than usual . Both exports and imports developed very unfavourably. with the exception of marginal decreases in the fourth quarter 2001 and the third quarter of last year. Among service producers. Unemployment also revealed an unfavourable tendency and increased somewhat from the third to the fourth quarter.9 percent lower than the corresponding quarter of 2007. In total. Even stocks of intermediate goods increased. During the fourth quarter of 2008 gross domestic product was 4. The extremely poor GDP growth was mainly marked by a gradually weakening global demand. produced by the Swedish National Institute of Economic Research. This was the first downturn since 1993. since exports to a large degree consist of investment goods. The Economic Tendency Survey. The global financial crisis has hit investment activity very seriously.4 percent. compared to corresponding quarter of the previous year. During the latter part of 2008. Due to the gradually deteriorating economy during 2008. Figures for January 2009 confirm these tendencies. which was a far worse outcome than predicted at the beginning of the year. In the fourth quarter a decrease of inventories could be noted and this contributed markedly to the contraction of GDP. Notices of lay-offs increased sharply at the end of 2008 and this may affect employment and unemployment with some delay.  The Swedish economy – published March 2009 . Nevertheless. this had a strong negative effect on GDP growth. The chemical industry continued to perform reasonably well. As a result. i. exports of goods came to a complete halt. Consequently. which was also the case for the manufacturing industry this time. Household consumption decreased by slightly more than 3 percent. Imports of goods were also down sharply but not as much exports. the status of the economy at the end of the year was quite different from the beginning. This reduced consumption seems to stem from psychological reasons rather than lower household income. this figure must be treated with some caution since seasonal adjustment works less well when there are sharp fluctuations in the economy. The drop in household consumption coupled with the continued increase of disposable income resulted in record high household savings. This is the largest drop since 1980. GDP for all of 2008 also went down. There was a continued changeover to investments financed by leasing. value added has fallen the most in the trade industry. The previous strong employment growth came to an end during 2008 and employment showed signs of a decrease from the third to the fourth quarters. seasonally adjusted. households have reduced their spending and have started to act more cautiously.e. During the fourth quarter when the financial crisis started to affect the real economy in a more obvious way. The lower global demand has to a large degree affected the passenger car industry which constituted a large part of the total drop in production in the manufacturing industry. net exports held back GDP growth. has pointed at much greater uncertainty among households about both the economic situation in Sweden and the economy of households. A deteriorating economic situation often leads to larger stocks of finished goods. In the fourth quarter. So far the lower economic activity has not affected employment to any large extent. Influenced by the severe economic state.Summary Economic crunch boosts household savings The gross domestic product (GDP) for the fourth quarter of 2008 showed the largest decrease since the first quarter of 1993. Fourth quarter for each year Gross fixed capital formation was comparatively stable and only decreased by approximately 1 percent. The rapid decline of inventories held back GDP growth as well.

A development like this also appears in the OECDcountries during the end of 2008. the exports contributed to this development. Source: OECD and Eurostat Data up to and including fourth quarter 2008 The drop in the United States GDP can mainly be explained by reductions in investments and household consumption. showed significant downturns in economic activity during the fourth quarter last year. this change is normally slower than the change in GDP and appears with a time lag.0 1. the prevailing state of the world economy could be considered troubled. 08-506 942 27 and Tomas Thorén. This indicates that Sweden is losing market shares in Germany. Turkey followed the same inflation pattern as most other countries. Last December.oecd. Haugh et al (2009) have studied the macroeconomic consequences of financial crises originating from the banking sector3.financialstability.org/wbos/Index. Norway.aspx?QueryN ame=251&QueryType=View&Lang=en 3 David Haugh. illustrated by the trend in GDP. 08-506 941 46 1 http://www. On the other hand.0 -0. Both in the European Union and in the United States the economic activity in general contracted more slowly than in Sweden. the second largest trade partner of Sweden. partly due to the depreciation of the currency. The president’s plan Making Home Affordable. the largest export market of Sweden.gov/makinghomeaffordable/ 2 The background information to this paragraph comes from the OECD labour market statistics: http://stats. Contrary to most other countries.0 0. OECD. Earlier. Nevertheless.5 0. right now this does not manifest itself as clearly as it use to. In Europe this share is somewhat more than one percentage point higher. Iceland started out with a growth in prices by 4 per cent that soared up to 20 per cent towards the end of the year. The growth in prices was lower in the G7 countries than in the OECD as a whole. there has been a recognisable chain of time lags among changes in economic activity over the world. However. This development was followed by a decrease in economic activity in a narrow group of countries in the third quarter and in a wider group during the fourth quarter.0 -1. March. Furthermore. A lower level of oil prices may have favourable effects on both households and industry. it is striking that among the OECDcountries only Japan reported a stronger fall in economic activity than Sweden. when the growth in prices was held back. Even Germany. This development clearly indicates that the Icelandic crisis is profound.8 per cent of the labour force in the OECD countries was unemployed. a general increase in German imports could be detected. Not only are there few persons unemployed in the Netherlands. When there is a decrease in overall demand. 6. Patrice Ollivaud och David Turner (2009) The Macroeconomic consequences of banking crises in OECD countries. may be considered a small ray of light in the American economy1. both investments by firms and households (in houses) tend to diminish more than proportionate. OECD Working Paper No 683. but its labour market has not yet been particularly affected by the otherwise fully obvious economic downturn2. South Korea and the Netherlands are superior in this with unemployment rates as low as about 3 per cent. weakened markedly during the first quarters of 2008. Above all else.5 1. while Swedish exports to Germany continued to decrease. aiming at refinancing or modifying the mortgages of homeowners. However. However. Those crises have led to larger losses in production than general economic downturns.5 GDP US GDP EU Inflation US Q 1 2008 Inflation G7 Inflation OECD – Europe Inflation OECD – Total Q 2 2008" Q 3 2008 Q 4 2008 GDP CPI 6 5 4 3 2 1 0 downwards in the prices of goods and services generally follows. as opposed to the pace of four per cent during the beginning of last year.International outlook The world economy contracts Total demand.0 2. Contact persons: Eva Hagsten.5 -1. an adjustment The Swedish economy – published March 2009  . The withheld demand has also led to heavy reductions in the world market prices of crude oil. managed to retain its GDP-growth in the fourth quarter. As an effect of the general economic state. the development on the national labour markets continued to deteriorate during the fourth quarter of 2008. The fourth quarter showed a growth in consumer prices by 2 per cent on average compared with the same period the year before. Norway. but with the exception of beginning from a much higher level. Exports have played an important role in the recovery after these earlier crises. since countries from several continents seem to experience similar economic turns. GDP growth and inflation in the OECD countries Percentage change from corresponding quarter previous year 3.5 2. Given this historical background.

Import adjustment means that instead of calculating effects from net exports (where imports on GDP growth are deducted from exports only) the total effect is distributed among the items on the expenditure side of GDP. In spite of the large drop in the fourth quarter. However. Net exports in the fourth quarter held back GDP growth by 1. Norway. where the different items on the expenditure side of GDP have been adjusted for import contents. Exports show a very clear picture of concentration. The drop in demand during the fourth quarter was very distinct on all the large export markets. but at a somewhat slower rate than exports of goods. Swedish exports have been hit hard. Germany and Norway are still the two largest destinations for Swedish exports. show that exports of motor vehicles. It was also a considerably larger negative contribution than from import adjusted change in inventories and household consumption. measured in current prices. import adjusted Net exports. The decline of exports to the United States.2 percentage units. according to their import content. Foreign trade had a considerably negative effect on GDP growth. because exports fell more than imports. metals and machinery and equipment have decreased for the fourth quarter. since investment goods constitute a large part of the exports. Therefore the decline had a considerable effect on total exports. unadjusted 2006 2007 2008 Data up to and including fourth quarter 2008 Source: National accounts The large negative effect on GDP growth is not unique.3 percentage points. During 2007 net exports had almost the same. At the same time. Decline on all large export markets Because Swedish exports of goods rely heavily on investment goods. Motor vehicles and machinery are by far the two largest commodity groups in Swedish exports.8 percent during the fourth quarter compared to the previous quarter. has lost much importance during recent years. compared to the corresponding quarter of 2007. Trade in services gave no support as both exports and imports of services were comparatively unchanged during the fourth quarter. Swedish exports have been hit more severely than the exports of many other countries. or even larger. effect on GDP growth during the first as well as the third and the fourth quarters.1 percentage points. Swedish foreign trade continued downwards last year because of a drop in international demand. The reason was the sharp drop in exports of goods which amounted to slightly more than 10 percent compared to the corresponding quarter of 2007. Denmark and Norway was most visible. As a consequence. Contribution to GDP growth from exports Percentage points 4 3 2 1 0 -1 -2 -3 2003 2004 2005 contribution to GDP growth by exports was –2. most notably as a result of the drop in trade of goods. which led to the considerable drop in GDP. The importance of the different export markets seems to have been largely unaffected. This was the first time during the last five years that the import-adjusted calculations showed a negative effect from exports. Denmark. while the drop was less to Germany and the United Kingdom. when GDP fell by about 1 percent. and the second time that contributions from import-adjusted exports were lower than exports not adjusted for imports. which was the largest export market as recent as 2005.Exports and imports Drop in exports of goods reduced GDP The international slowdown in the economy has hit investments hard. but the drop was a little more moderate or 2. The demand for Swedish exports on the American market has fallen more rapidly than on other large export markets. led to less of a downturn for total exports and imports. and the five countries Germany. trade in services. At the same time imports of goods also declined substantially. Both exports and imports were down sharply during the fourth quarter. According to alternative calculations of contributions to GDP growth. This is a substantially lower growth rate compared to the preceding two quarters. The United States. because of its better development than trade in goods. United Kingdom and the United States constituted more than 40 Exports. imports increased more rapidly than exports and for 2008 net exports contributed –0. exports increased somewhat for all of 2008. The drop on the German market seems to have speeded up from the third to the fourth quarters. The negative effect from net exports during the fourth quarter of 2008 coincided with an even larger effect from both inventories and household consumption. The decrease of imports was also larger.9 percent. The import-adjusted contribution from exports was 0. The large decrease of exports of goods to the United States in recent years is mainly caused by lower exports of pharmaceuticals and passenger cars.4 percentage points. Exports dropped by 3. the  The Swedish economy – published March 2009 . Statistics on foreign trade of goods.

that held back GDP growth.3 –0.4 GDP –4.2 The first two contribution columns show the contributions from the different items on the expenditure side.8 –0.1 . the drop in demand for Swedish goods has mainly hit two commodity groups: pharmaceuticals and passenger cars.8 –1. This is because imports declined sharply and thus gave a positive contribution to GDP growth. The drop continued during the first three quarters of 2008. it was maintained in 2006 by a sharp increase in exports of pharmaceuticals. This resulted in a lower level for exports of pharmaceuticals.2 –0. it was the production of goods.2 percent. The result for the fourth quarter 2008 is shown in the table below. Most of the decline occurred in 2007.percent of the Swedish export market for goods in 2008.2 1.2 –1. .4 . form. Net exports . 1. In 2007 the demand for Swedish pharmaceuticals decreased substantially.8 –0. –2. The Swedish economy – published March 2009  . Exports –7. see the Swedish economy – statistical perspective number 1 2007.2 –1.9 –1.6 0. The distribution of imports among the different components results in a more accentuated contractive effect from exports. the drop took place from a very high level. but mostly as a consequence of a very substantial drop in the exports of passenger cars. percentage percent Traditional method Import adjusted Q 4 2008 Q 4 2008 Q4 2008 Househ.4 0.5 –4. Since exports of goods Contributions to GDP growth In 2008 GDP growth was –0.5 .7 –0. . A recovery took place during the fourth quarter of 2008 when exports of pharmaceuticals counteracted the fall of the total exports to the United States. –0. calculated according to the traditional method.3 3.1 –1.2 .7 –0. and the contribution from Swedish production to GDP growth can be calculated1.2 0. 0.1 0. However. 1 For more information about these calculation methods.1 0. while the negative contributions from other items are moderate. For the entire year of 2008. The importance of household consumption and change in inventories will be somewhat reduced according to this calculation method.6 0.0 –0.8 2.1 –2.8 –0. However.2 0.0 –0.2 The modified calculation shows that the weak export has the largest withholding effect on GDP growth. Contributions to GDP growth from different industries Contributions. –4. In 2007 and 2008. –1.1 0. and above all the manufacturing industry.8 percent (not calendar adjusted).1 –0. Volume growth for the different items on the expenditure side of GDP and their contributions to GDP growth can be seen in the table below from 2007 to 2008. By using the input-output tables for the year 2005.3 0. This means that the exports of pharmaceuticals to the United States fell by almost 50 percent in two years.2 Change in invent. Contact person: Tomas Thorén. –3.0 –4. A corresponding calculation can also be done for GDP with the production approach. The large effect from taxes on production for the fourth quarter is due to the sharp drop in household consumption that affected the value added tax. Percentages of total exports of goods 14 12 10 8 6 4 2 0 98 99 00 01 02 03 04 05 06 07 08 Data up to and including 2008 Source: Foreign trade statistiscs United States Germany Norway United Kingdom Denmark to the United States peaked in 2005.0 –0.0 –0.2 –0.2 –4.2 –1.7 3.3 0.5 0. restaurants Value added total Taxes on production Subsidies GDP –2.2 Imports –5.2 –1.3 –0. while growth for the fourth quarter was –4. compared to the corresponding quarters of the preceding year. which coincided with a drop in the Swedish production of pharmaceuticals. In 2008 the drop of exports to the United States continued.8 –0.4 –0. Contributions to GDP growth 2008 Volume growth. 0. Contributions. where corrections have been made according to the import content in different items. In this case the contributions to total value added from different industries are calculated. 08-506 941 46 Pharmaceuticals a large part of the rise and fall of exports to the United States The fall from the top ranked destination country for Swedish exports for the United States took place at the same time as the start of the slowdown of the American economy a couple of years ago.0 –2. hotels. cons. cons.1 Gross cap. as well as for the fourth quarters of both years.3 –3. It contributes to almost half of the GDP decrease. The production of goods and of services had approximately the same effect on GDP growth. percentage points Q4 2008 Value added production of goods – of which manufacturing industry – of which construction Value added production of services – of which trade. an adjustment can be made according to the import content in demand.1 0.1 0. total annual exports to the US decreased by SEK 22 billion – from more than SEK100 billion to slightly less than 80 billion per year.3 Govt. Demand within each component relates to a larger or smaller share of imported goods. Pharmaceuticals accounted for 9 billion of the total of 22 billion.5 .

 The Swedish economy – published March 2009 . A remarkable increase occurred during the fourth quarterof 2008 compared with the corresponding quarter one year earlier. Nevertheless household consumption fell. According to traditional economic theory there are different motives behind households’ short-term savings (inflation adjusted yield. Percent of disposable income Amortizations behind slower debt growth? Another factor that “locks” savings are amortizations on household liabilities. machinery. thereby contributing to the fall of GDP by about one percentage point. Secondly. Households’ outstanding stock of liabilities thus increased SEK 37 billion during the fourth quarter compared with an increase of 57 billion the corresponding quarter of 2007. as an effect of the accrual basis used in the national accounts. in particular on a short-term basis. it is not possible to draw any decisive conclusion about the amount of amortizations since the slower debt growth could also be the effect of fewer new loans due to lower turnover and falling prices on the housing market. demographic factors are important in a long term perspective. keeping a buffer etc. lowered taxes and an improved net balance of property income led to a 6 percent increase of households’ disposable income in 2008 (at current prices). The households’ savings ratio at that time rose by more than 4 percentage points to 7. A conceivable scenario could be that the earlier high interest payment has been exchanged into increased amortizations with no immediate effect on households’ propensity to consume.Household savings Increased household savings cut Swedish GDP growth Households’ disposable income developed positively last year. a considerable amount is the real savings. resulting in an all-time high (since the 1960s) savings ratio. However. Thirdly. i. The savings ratio thus rose to almost 12 percent of households’ disposable income. that households do not consume income increases as they usually do.4 percent of disposable income (compared with the same quarter in 2007). namely. some changes in taxation rules have not yet had a full monetary effect for the households and they may not be aware of the full income picture. Similarly. changes in pension fund reserves are a major part of households’ savings with almost no liquidity at all. During the fourth quarter the lowest debt growth for a fourth quarter since 2003 was recorded in the statistics. net acquisition of non-financial assets (real estate. equipment). The national accounts statistics of the fourth quarter 2008 is a telling example. Firstly. the highest level recorded in the statistics since the 1960s. Household savings rate 14 12 10 8 6 4 2 0 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 Data up to and including 2008 Source: National accounts The financial crisis affects consumer and savings patterns One important explanation of the sharp rise in savings is of course the current crisis in the economy. The increased savings imply a corresponding loss of consumption demand. Increased salaries. At the same time it is worth mentioning that the savings concept in the national and financial accounts is not the same thing as the liquidity buffer that can immediately be used for consumption of goods and services. The contribution to the drop in GDP was about one percentage point. At the same time consumption diminished in absolute values. This component is fairly stable over time. The household sector’s choice between savings and consumption has a great impact on economic growth and employment.). The savings increase corresponds to a considerably lower consumption demand. Worries for expected consequences in the form of increased warnings of unemployment and decreasing asset prices (stock exchange and real estate) have probably contributed to the “abnormal” behaviour.e.

2 % –30. in the national accounts..3 18 % % % % % % % % % mdr . These statistics show a fourth quarter record figure for households’ net lending. (mixed income) is estimated roughly at 5 percent of GDP.1 2.7 4.9 8. 08-506 945 42 1 The official savings ratio The Swedish economy – published March 2009  . Further there are some problems with periodizing interest.9 18.Some important income and expenditure items in the household sector Fourth quarter 2008 and changes compared with fourth quarter 2007 Level Wages and salaries Pensions. it should be pointed out that the calculations of income and savings in the national and financial accounts are subject to uncertainty. Contact person: Bo Bergman. This is valuable for the economic analysis. The most important uncertainty is nevertheless the normally bad correspondence between the non-financial and financial accounts as regards the calculation of net lending.8 % 26 SEK billions 23 SEK billions 14. The high savings rate is consequently reflected in the quarterly statistics on household financial assets and liabilities (Sparbarometern).4 –1. Household financial assets and liabilities 80 60 40 20 0 -20 -40 -60 1996 1998 2000 Source: Financial accounts 2002 2004 2006 2008 Data up to and including 2008 –2.3 –4.3 % points 5. but a consistent savings picture during the fourth quarter However. Income taxes Capital taxes Interest income Interest expenditure Disposable income Consumption Saving 1 Saving in pension fund reserves Saving 2 Savings ratio 1 Savings ratio 21 Gross capital formation Net lending Net lending according to the financial accounts Financial assets Liabilities 326 SEK billions 134 SEK billions 62 SEK billions –114 SEK billions –2 SEK billions 7 SEK billions –30 SEK billions 378 SEK billions –375 SEK billions 3 SEK billions 27 SEK billions 30 SEK billions 0. expenditure.7 % 18 mdr 4. Household income.4 % 21 SEK billions 27 SEK billions 32 SEK billions 69 SEK billions –37 SEK billions Change 3..1 10. Billion SEK Assets Liabilities Statistical uncertainty … However. For instance. Change compared to corresponding quarter previous year. income from the hidden economy etc.8 % 7.0 % Fourth quarter 2008. social benefits Operating surplus etc. savings and how they have saved can then be studied simultaneously. both the level and the change of net lending are fairly consistent in the two ways of calculation. in the fourth quarter of 2008.6 –0.8 % points 4. Liabilities increased slower and financial assets higher than normally.

In total the drop in the COICOP group transport was slightly more than 1 Non-profit institutions serving households. As described in the section about household income and savings.  The Swedish economy – published March 2009 . adjusted for imports. 8 6 4 2 0 -2 -4 -6 -8 81 84 87 Source: National accounts 90 93 96 99 02 05 08 Data up to and including fourth quarter 2008 Household consumption NPISH1 excluded. compared to the same quarter last year.4 percent. At most consumption decreased by 0. A reason behind that crisis was the interest rate shock caused by the tax reform which took place in 1990–1991. while the number of notices of lay-offs rose. A real interest rate increase made consumption less desirable and household savings rose tremendously. Household consumption expenditures affected GDP growth downwards by 1. The biggest drop during 2008 occurred in the fourth quarter when as much as 35 percent fewer cars were registered. the large reduction of household consumption in the fourth quarter was because households chose to save a much larger share of their disposable income than before. Meanwhile the apprehension of becoming unemployed rose. Households’ opinions about the economic situation. At the same time savings rose substantially. was for the fourth quarter 2008 the gloomiest since 1993. Then consumption fell by as much as 6.Household consumption Households postponed their consumption Household consumption fell by 3. More than half of the drop is explained by lower household consumption as companies’ consumption/leasing is more robust over time.3 percent in volume in the fourth quarter of 2008. New registrations of passenger cars Thousands 40 35 30 25 20 15 10 5 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Lowest consumption growth in the last 15 years Real household consumption expenditures. The IT crash in the beginning of the 21st century did not influence consumers to the same extent. For the fourth quarter the drop was even bigger. The development of household consumption after the IT crash has been smoother and lacks the consumption peaks that can be seen in the years before the IT-crash and in 1986 and 1987. Household purchases of passenger cars contributed the most to the decline. both for the household and for the total Swedish economy.9 percent. The number of notices of lay-offs was four times as high in the fourth quarter as in the third quarter of 2008. This was one of the factors that may have contributed to creating worries among households when uncertainty about future income increased.1 percentage points. A decline in household consumption for two quarters in a row has not occurred since the beginning of the 1990s. fell by 3. This is the greatest volume decrease a single quarter since the last financial crisis back in 1993. From May 2008 onwards. NPISH excluded. the number of newly registered cars bought by companies and households fell compared to the same month the previous year for every single month.4 percent in volume terms in the fourth quarter of 2008 compared to the corresponding quarter of the previous year. Percentage change from corresponding quarter previous year Low demand for cars The single biggest cut in demand from households affected passenger car sales. 2006 2007 2008 2009 Data up to and including February 2009 Source: Swedish Institute for Transport and Communications Analysis Household purchases of cars decreased enormously in volume terms already in third quarter. Households experienced to a higher extent that it was the wrong time to buy capital goods and to renovate their homes. by 24 percent compared to the same quarter of the previous year. affecting households with heavily mortgaged estates severely. or 42 percent. According to the Labour Force Survey the number of employees was unchanged during the period. according to the Consumer Confidence Indicator produced by the National Institute of Economic Research. This is the lowest quarterly consumption development in 15 years.

total consumption dropped for 2008. exclusive of NPISH.1 –2.1 –15. Both groups had large price increases.3 0.7 –5. exclusive of NPISH.3 0. Contact person: Caroline Ahlstrand. Household consumption expenditures. The contribution from the group transport to household consumption was –2.6 6.2 –0. seasonally adjusted and in constant prices. which measures the Swedish crown according to a weighted basket with foreign currency.0 –2. Household consumption of these products still increases but only when adjusting for quality improvements.4 percent. in constant prices.0 0.3 0.0 0. consumption 100 Source: National accounts –1.6 9. Expenditures for tobacco and food decreased by as much as 21 percent. photo equipment and computers (included in miscellaneous goods and The Swedish economy – published March 2009 Source: National accounts Data up to and including 2008 In the graph some of the COICOP groups are shown that had the largest impact on household consumption development during fourth quarter of 2008. increasing by almost 10 percent. For the entire year of 2008 households have gradually lowered their consumption each quarter.5 percent compared to the previous quarter. Consumption for the third quarter fell by another 0.2 percent. compared to the previous quarter.1 0.8 –0. electronic goods like TV. % compared to household Q 4 07. Because the Swedish crown declined in value compared to other currencies. 08-506 943 33 10 . that is.6 –11. Consumption for both the first and the second quarter decreased by 0.7 –3. households chose other alternatives like rail transportation and other public transport.7 –8. % consumption. The TCW index.0 0.4 services) have contributed strongly in recent years to the rise in household consumption. household consumption expenditures rose for most of the groups compared to 2007. since the fourth quarter last year. Exclusive of NPISH.0 0. clearly shows a weakening of the Swedish crown from the third to the fourth quarter. Instead. More technical improvements are included without a corresponding rise in prices. imported goods became more expensive and exported goods cheaper. in current prices. and fell in the last quarter by 1. Telecommunications showed the opposite trend.0 –0.4 –0.5 –3. which has fallen tremendously from 2007 to 2008. As a result.3 percent in volume terms from the fourth quarter 2007 to the same quarter 2008. hotels 6 Miscellaneous goods and services 12 Total consumption in Sweden 101 Of which purchases by visitors from abroad –6 Of which consumption by residents in Sweden 94 Direct purchases abroad by residents in Sweden 5 Total Swedish househ.5 percentage points.6 –0. which may have affected the consumers to tighten their consumption and choose cheaper alternatives. For example. decreased by 3.2 0.5 –2.3 –3. The total amount. Household consumption (excl. which both rose by 7 percent. Looking at all of 2008. Growth has slowed down and is now lower than in previous years. In addition. However. Household consumption fourth quarter 2008 Share of Change in Contribution to household volume a raise in consumption. However. One significant exception is of course the purchase of cars. Two thirds of the drop in household consumption can thereby be explained by the enormous decrease in transport.2 –0.2 percent in 2008 compared to 2007. if more people buy “all inclusive” charter trips where food and beverage are included in the price. The consumption of Swedish residents abroad decreased sharply and contributed to the drop in total Swedish consumption by –0.1 2. In this commodity group large quality adjustments have taken place.1 –1. it looks like consumption abroad has decreased.15 percent in last quarter of 2008. that households paid for these kinds of goods decreased in both the third and the fourth quarter of 2008. Household consumption 15 10 5 0 -5 -10 -15 -20 -25 2001 2002 2003 2004 Percentage change from previous year Furnishings Transport Alcoholic beverages Motor vehicles 2005 2006 2007 2008 Total household consumption. NPISH) has decreased every single quarter during all of 2008. Decreasing household consumption in 2008 Households lowered their consumption in favour of savings during the last part of 2008.4 and 7.8 percent. it should be noted that seasonal adjustments are more unstable when exceptional changes occur. is not necessarily due to lower consumption abroad. Households reduced not only their consumption of durable goods as cars and furniture.8 –0. 6. decreased by 0.9 –0. As a consequence the price indexes decrease. total Swedish household consumption dropped by 3. DVD.2 percentage points.4 –3.6 percent respectively.3 3. % Food and non-alcoholic beverages 15 Alcoholic beverages and tobacco 4 Clothing and footwear 6 Housing 32 Furnishings 6 Health 3 Transport 14 Communications 3 Recreation and culture 13 Education 0 Restaurants.

grew by 0. The increase of social benefits in kind (in part because of the new dental reform) eased the decline somewhat. which is the second largest activity for county councils. Central government consumption expenditure declined by 0. had a positive development for the entire year of 2008.0 0.7 percent.g. while specialised medical care. Consumption volume according to current and older method Volume calculated according to the current method is higher than that calculated according to the old cost method.5 0. and that more children are in preschool. The major activity in the individual services that had a negative effect was compulsory school. Government consumption 5 4 3 2 1 0 -1 -2 -3 Q 1 08 Source: National accounts Q 2 08 Q 3 08 Q 4 08 Data up to and including fourth quarter 2008 Volume measures Cost method Consumption of municipalities increased by 1.6 Municipa. Hours worked are important for the outcome because they have great importance for wages and social contributions in the collective consumption but also for the quarterly distribution that is made of volume measures for the individual production. A strong contributing factor to the poor development at the end of the year was the number of hours worked. increased throughout the year.3 Council consumption rose by 2. educational services and elderly care.4 1.4 percent in volume in 2008.9 General gov.0 –1. Municipalities’ consumption expenditure grew by 1. AP-funds incl.5 0.3 percent in 2008 and thus gave a positive contribution to the GDP development.. 11 The Swedish economy – published March 2009 . combined with increasing sales (which is a deduction from consumption). –0.3 0..4 0. Therefore the accounts of public consumption are complemented here with volume growth rates for both the self-produced individual and collective services. 2008 General governm.7 percent in the year 2008 and contributed most to the volume growth for municipalities. The social benefits in kind continued to grow strongly during the year and the quarter. Municipalities with the largest increases reported that more and more schools operated privately.6 percent. AP-funds incl. but last quarter it grew by only 0.4 percent.4 percent. Since over 90 percent of the costs of production in the county councils is attributed to the production of individual services production.8 General gov.7 1.1 2.1 Development for the sub-sectors County council consumption continued to increase even in 2008. –0.County lities councils 1. Volume change from corresponding quarter previous year.County lities councils 1. which decreased in local municipalities. production is of great importance in addition to sales and the social benefits in kind.7 percent The municipal consumption volume growth was 1.5 1. development of these coincides in principle with the development of the total production within the county councils.8 percent.collective services General government 1.4 percent The volume measure of general hospital care. Elderly care has been placed on the private operators in a larger scale. grew by 1.3 1.6 percent. except for general government for the full year 2008.7 0.9 2.individual services .1 0. 2008 Consumption Production . consumption 1. The social benefits in kind grew by 9. Municipalities County councils General governm. The main reason for the decline of government consumption was weak production. Municipalities’ own production has evolved slightly positively in 2008. this time by 2. Percent Central governm. mostly because of the sharp increase in social benefits in kind. Investments in the public sector rose by 4. Since public consumption is now calculated using volume indicators for the production of individual services. and thus helped to hold back the production growth in 2008. Production of collective services.4 0.0 Municipa.7 percent in 2008. which constitutes the bulk of production for county councils.3 0. Purchases of main activities like e.Government consumption Government consumption still growing The total government consumption expenditure increased by 1.4 1.4 0.1 percent. which represents approximately one quarter of total municipal production. where production fell by 3.

during the years of the overheated economic boom. implying that the rate of increase was more than half that of the year before.e. This is explained by the production of individual services which decreased by 1. 12 . mostly because of fewer registered students. Central government sales. The long-term upward trend for gross fixed capital formation now seems to be broken. gross fixed capital formation for the third and fourth quarter of decreased slightly. The weakening of the economy has now also reached investments. and the lowest increase since 2003. even though weak.2 percentage points of the actual GDP downturn of 4. the current level of investments in the economy is seen as high. the gross fixed capital formation ratio increased further compared to the year before.4 percent The decline in central government consumption was due to an almost unchanged production while sales increased. from a weak starting point a few years into the current decade. This is the highest level since 1990. General government social benefits in kind increased by 8. rose by 4. the largest part of the government production which amounts to just over three quarters. Contact person: Vera Norrman. In addition. i.5 percent in 2008. The production of individual services decreased because several of the largest areas. Compared to the previous quarter. The Swedish economy – published March 2009 150 140 130 120 110 100 90 2000 2001 2002 2003 2004 2005 2006 2007 2008 Data up to and including fourth quarter 2008 Gross fixed capital formation Volume index 2000=100. However. had a negative volume growth in all quarters.0 percent. Due to the stronger development earlier in the year.6 percent in 2008. the debate on the national economy has often brought forth viewpoints that investments in Sweden are too weak and too low.9 percent in volume compared with 2007. have been by a few tenths of a percent. both external and internal. This implies that the downturn in investments – in terms of GDP contribution – corresponded to 0. measurement over four quarters now shows a downturn. gross capital formation was the fastest growing item in the balance of resources last year.6 percent in 2008. 08-506 943 04 Gross capital formation Investment boom now broken The long-term upward trend for gross fixed capital formation now seems to be broken. Due to the considerable GDP growth in 2007. Investments last year continued to develop considerably better than the entire GDP. gross fixed capital formation was thus slightly more than one percent under the level for the fourth quarter 2007. Durable goods for defence decreased by 17 percent in 2008. Since 1980 the investment ratio has been higher than the current one only during the years 1987–1990. such as university education. investments have gained strength as a feature in the economy. as illustrated in the investment ratio (the percentage gross fixed capital formation of GDP) which rose from 19 percent in 2007 to 19.8 percent. The economic bright spot that has endured for a long time is now beginning to fade. while the production of collective services. The decreases.Central government consumption expenditure decreased by 0. During the fourth quarter of last year. During the fourth quarter investments in inventory had a significant downward effect on GDP growth. gross fixed capital formation still rose by 3. and is now the highest since 1990. Seen from a longer time perspective. Despite the slowdown. seasonally adjusted and compared to the previous quarters.The most important reason for reduced investment development in 2008 was a sharp decrease in housing construction. Seasonally adjusted quarterly figures Gross fixed capital formation GDP Source: National accounts High investment ratio in a historic perspective Despite the strong development. The production volume for all of 2008 ended was unchanged. Those investments which increased incessantly quarter by quarter since third the quarter 2003 have now decreased during both third and fourth the quarter of 2008.3 percent. The explanation is mainly the sharp rise in the second half of 2008 due to increased dental care expenditures as a result of the new dental care reform. increased by 0.

development is otherwise more uneven than usual.3 percentage points in recent years.7 1.4 –14.4 2.8 –10. Similar to previously during the year. Gross fixed capital formation SEK billions.8 percent. plants and roads continued to show a sharp increase of 5. Certain industries reported very large increases of their investments while others showed considerable downturns. but still at a decreasing rate.3 5.3 –6.4 –3. investments in other buildings.8 8. Sweden’s results are even more favourable when compared to the world’s largest economy the US. with a marginal decrease in the fourth quarter of barely one percent and an equally large rise for all of 2008.6 –0.The percentage of gross fixed capital formation of GDP is also better in an international perspective than before.7 17. diminishing the will to invest.2 10. Those industries that have cut back on development are business services (down 4.8 10. public sector investments during the fourth quarter increased by a few percent. The development for granted building permits does not indicate any quick turning point upwards for construction 1 Excluding real estate services.8 7.2 Q3 4.8 3. and that for multi-dwelling buildings by 23 percent. In 2008 the investment ratio was 16.6 –4. Housing construction decreased by 5.8 22.1 16. Renovation investments continued to increase.5 %) and the financial sector where the crisis seems to have been hit hard and fast. clearly better than investments of the business sector which now showed an equal decrease.8 2.7 1.1 15. However. 523 88 49 193 46 97 47 50 620 201 63 98 164 94 Drop in housing construction continues to accelerate One of the most outstanding features of the investment picture during last year was the sharp downturn of housing construction. implying that the distance to the EU15 has shrunk by 1. This figure was an improvement of about one-half of a percentage point compared to the year before.2 –0.9 11.5 1.0 2. construction of homes dropped sharply and accounted for the entire downturn of housing investments.3 –2. 20 and 9 percent. the investment ratio since 1980 was only higher during the years 1988–1990. and during the most recent five year period its growth was considerably lower at slightly more than one percentage point. Credit institutes and insurance companies reduced their investments sharply.0 13.3 22. New construction for one-or two-dwelling buildings fell by 26 percent.1 1.4 Q2 5. was due to the sharp declines of construction and property management.0 3. the distance to the EU15 was 3. resulting in a further increase of one percentage point for the entire year.0 –1.8 8. the first clearly marked downturn since 1997.9 5.9 8. which otherwise was the first downturn since the beginning of 2004.5 13.3 2. In 2008 the investment ratio for the EU 15 was 20. the largest member country in the EU. During the fourth quarter the downturn continued to accelerate with a 14. current prices and percentage change from corresponding quarter previous year.8 8.8 7. mainly due to a sharp increase in construction investments in Stockholm.5 percent without consideration to housing investments. mining industry and the energy sector had the most expansive development.5 7. The main reason for the downturn within the business sector.7 Sweden 2000 2001 2002 2003 2004 2005 2006 2007 2008 Data up to and including 2008 Source: Eurostat It has also been maintained that the upswing that occurred in the investment ratio in recent years is mainly due to the sharply rising housing investments during this period. The slowdown and weakening of housing construction has been going on incessantly quarter after quarter since the beginning of 2006. but this does not hold true either when comparing backwards in time.7 20.9. Gross fixed capital formation Percentage of GDP 25 The transport sector.5 –4.9 4.1 21. municipalities showed the largest increase in investments. with continued substantial increases of investments during the fourth quarter by about 39.9 2. investments in this area still have been doing relatively well.6 4.9 –0. 13 The Swedish economy – published March 2009 . Within the business sector.2 0.7 percent. Significant cutbacks within the financial sector For the first time in many years.3 13. Despite the increasingly weak industrial economy.1 –3.7 percent drop. respectively. when the rate of increase was highest.4 percent for all of 2008.4 percentage points.2 percent lower than in Sweden. In 2003 when the upturn for investments began in Sweden.4 Q4 –1.5 3. a decrease of one-half of a percentage point since 2003. constant prices EU15 20 15 10 5 0 Business sector Manufacturing industry Energy industry Services producers1 Business services Public sector Central government Municipalities Total Machinery Transport equipment Housing Other construction Software Source: National accounts 2008 Full year Q1 5.4 6. Within the public sector. had an investment ratio that was 19.7 5. In 2008 the US investment ratio was 17. By using this method of calculating. Germany.1 13. by over 17 percent in the fourth quarter after a considerable decrease in the third quarter as well.

Basically. According to inventory statistics. an increase of inventory of finished goods was both involuntary and unwelcome. Considering the sharply weakened demand. investments for transport means grew sharply by 15 percent in the fourth quarter. all important industries report plans for reduced investments. the build-up of inventory of finished goods has been much more extensive.9 percent. or SEK 7.5 percent. the increase in inventory of finished goods in industry only had a small effect on GDP development between the fourth quarter of 2007 and the fourth quarter of 2008. not even in the case of inventories of intermediate goods have desired levels of inventories been reached.7 percent. Considerable decreases in inventories from the manufacturing industry contributed the most. intermediate goods. wholesale trade had the largest decrease of inventories. software in particular. which accounted for the entire decrease in inventories from the fourth quarter of 2007 until the fourth quarter of 2008. and SEK 0. a buildup of inventories of finished goods occurred between the fourth quarter of 2007 and the fourth quarter of 2008. Within other areas of business – the energy sector and forestry – inventories increased somewhat and thus contributed to GDP development by 0. This decrease was so extensive during the fourth quarter because of the sharp cut-backs in producThe Swedish economy – published March 2009 Reduced inventories in trade A significant decrease of inventories occurred in trade from the fourth quarter of 2007 to the fourth quarter of 2008. The decrease in these inventories is not due to direct actions or decisions for changes of inventories in the enterprise. One important reason was that car leasing continued to increase sharply. According to inventory statistics. but trade in infrequently bought goods has also seen a reduction of inventories during the period. Industrial enterprises have expressed increased dissatisfaction in the Business Tendency Survey about inventories of intermediate goods being too large in the fourth quarter. seasonally adjusted and compared to the quarter before. during the second half of last year. which does not actually affect estimations of production. The build-up of inventory of finished goods began to increase more rapidly during the third quarter and then rose even more significantly during the fourth quarter. Involuntary build-up of inventory of finished goods As the economic situation gradually worsened. after an increase of 22 percent the quarter before. This applies to both the manufacturing and construction industry and the private service sector. but at the expense of a continued sharp decrease of car purchases financed individually. but decreases in trade inventories were also behind the downturn. Development of these types of inventories is directly connected to production development in enterprises and industry. the rise from the fourth quarter of 2007 to the fourth quarter of 2008 was SEK 2.5 billion in constant prices. Contact person: Bo Sandén. The Business Tendency Survey shows a drastic worsening of the situation of inventories for industry. further decreases in business investments are seen for 2009.4 billion in current prices.2 percentage points. Compared to the year before. but occurs automatically as a result in the changes of the production level of the enterprise. which totalled 12. During the fourth quarter investments in machinery and equipment remained unchanged at a high level. Nevertheless. Looking at the change of these inventories alone.8 percent. The increase in current prices for these four quarters was considerably larger. From the fourth quarter of 2007 until the fourth quarter of 2008. decreased during the fourth quarter. The decrease of industrial inventories contributed a full 1. due to a significant decrease in brokerage fees by 11 percent. Leasing investments gain ground In sharp contrast to the weak development in the construction industry. mainly concerning finished goods for direct delivery to customers.8 percentage points to this downturn. inventories had increased by nearly SEK 3 billion or about 4 percent in constant prices. implying that the upswing for the entire year totalled a strong 4. The third type of inventories in industry. Investments in other items. this decrease was at a slower rate than the sharp downturn of the third quarter. Investments in inventory brought down GDP growth Inventories had an unusually significant influence on the sharp downturn of the Swedish economy during the last quarter. GDP fell by 4.5 percentage points. This pattern of increased financing through leasing at the expense of individually financed investments re-occurs in the way that machinery investments are now financed.3 billion. According to the most recent questionnaire on investments sent to enterprises in the beginning of March. in many cases significant decreases in 2009 compared to 2008. The decrease of inventories here had a downward influence on GDP by about 0.since the number of permits continued to decrease during the fourth quarter. also increased despite the sharp decline of the production level. the corresponding decline of GDP development was 1. However. Current assessments from industrial enterprises about the size of inventories of finished goods have not been so negative since the Swedish economic crisis of 1991. tion levels that occurred in industrial enterprises between the fourth quarter of 2007 and the fourth quarter of 2008. However. 08-506 946 94 14 . In the short-term perspective. Sharp decrease in industrial inventories of goods under production A dramatic decline occurred for industrial inventories of goods under production.

The engineering industry is normally a high growth industry. The chemical and the wood and paper industry have performed better and been affected to a much smaller extent by the crisis. This decrease was also larger than that in 2001. but its specialisation in investment goods has proved to be a severe disadvantage just now. particularly for investment goods. as has already been shown. Goods production that diminished only during the year of the ICT crisis in 2001 this time dropped much more or by 1. This resulted in a drop in production of goods from 2007 to 2008. The manufacturing industry has been affected most sharply The export of goods has dropped significantly.3 percent compared to 0. considering that Sweden’s economy is small and highly dependent on exports. The growth rate for production has been negative only in four previous quarters. The value added of the business sector dropped from the third to the fourth quarter by an extremely large percentage. the fourth quarter resulted in a dramatic drop of over 6 percentage points for the value added of the engineering industries. 2008 in total is also unique Despite that this year started off quite well and the weakening of the economy did not become obvious until the third quarter. The financial crisis has made the financing of investment 15 The Swedish economy – published March 2009 . which are typically auction markets. Today’s financial crisis is unique in modern time and it is not particularly surprising that the effects on the Swedish economy have been that dramatic.3 percent.4 percent for 2001. Service production that has reached a growth rate of two percentage points during most of the last 15 years.4 percentage points during the last. The chemical industry seems to have best survived the crisis. which has been caused by this crisis that has led to excessive capacity in most industries. and in many cases quite impossible. it reached the extreme value of 2.The business sector A historical fall in the business production During the fourth quarter of 2008 production in the business sector fell sharply. As can be seen in the graph the drop in production was larger during 2008 than ever before during the period 1993–2008. Value added in the business sector 3 2 1 0 -1 -2 -3 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 Data up to and including fourth quarter 2008 difficult. including private consumption. Seasonally adjusted Chemicals Engineering Wood and paper Percentage change compared to previous quarter. This has added to the impact of the fall in the real economy. After a negative growth rate during the first two quarters with around half a percentage point for each quarter and more than a full percentage point during the third. This is the background to the very severe drop in demand for investment goods which also normally decreases towards the end of the business cycle. Value added for selected manufacturing industries 12 10 8 6 4 2 0 -2 -4 -6 -8 2004 2005 2006 2007 2008 Percentage change compared to previous quarter. was almost unchanged. Sesonally adjusted Source: National accounts Data up to and including fourth quarter 2008 Source: National accounts It is of course necessary to take into account that seasonal adjustments are especially problematic when development has been so dramatic. After comparatively limited negative growth rates during the first three quarters of 2008. Even if the forestry industry had experienced a negative growth for five successive quarters it has developed much less dramatically. which has eased the negative growth rates. development for the full year became extremely weak. never with higher growth rates than 0. The large drop of the Swedish currency in the second half of the year should also have strengthened the industry’s position on the markets. Forestry products are to a much larger extent dependant on the economy at large. to hit with full force during the fourth. which was only the second time since 1994 production fell on an annual basis.

0 -1. This development translated into yearly terms can be seen in the graph below.5 2004 2005 2006 2007 2008 Productivity growth has remained weak The growth rates for the labour productivity in the service producing part of the Swedish business sector have remained positive and very stable during 20 quarters in a row after the ICT crisis 2001 up to the second half of 2006. Growth has stopped in the service producing parts of the business sector during these two quarters.5 -2. Labour productivity 5 4 3 2 1 0 -1 -2 -3 -4 2001 2002 2003 2004 2005 2006 2007 2008 Percentage change compared to previous quarter. the decrease in the number of worked hours has not been on the same magnitude as the drop in production.0 -0. As seen in the graph above the weak production growth has so far not led to a large decrease in the number of hours worked. but compared to the goods producers it is still a relatively uneventful development. In yearly terms development looks quite different. Not even in the manufacturing industry has the large decrease in hours worked matched the very large drop in production. 08-506 944 66 The Swedish economy – published March 2009 16 . Hours worked Percentage change compared to previous quarter. However.5 0. in spite of the large reductions during the fourth quarter. This is not a sustainable development in the long run. Service providers as well as goods producers increased their input of hours worked sharply in 2008.0 0. The productivity level in 2008 was almost three percent lower compared to 2007 for the goods producers as well as for the service providers. Constant prices Goods producers Service producers Hours worked 6 4 2 0 -2 -4 Percentage change compared to previous year Goods producers Service producers -2 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 Data up to and including 2008 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 Data up to and including 2008 Sourcce: National accounts Source: National accounts Large differences in employment growth Development in the number of hours worked during the last two quarters of 2008 has been very different for the goods producers compared with the service providers.5 -1. the growth rate has on average been substantially lower than for the manufacturing industry.Value added in the business sector 10 8 6 4 2 0 Percentage change compared to previous year. However. The large number of people that have been given notices of lay-offs during the last quarter indicates that the drop in hours worked will increase substantially.5 1. Seasonally adjusted Service production Service producers Goods producers Manufacturing industry Source: National accounts Data up to and including fourth quarter 2008 Source: National accounts Data up to and including fourth quarter 2008 The fall in the demand for products from the manufacturing industries has caused a sharp drop in worked hours between the third and fourth quarter of 2008. Seasonally adjusted 2.5 2. Contact person: Hans-Olof Hagén.0 1. This has resulted in a decrease in labour productivity during 2008 for this part of the business sector as well.0 -2. This development has ceased to exist since the growth rate has been positive for just one of the last six quarters.

This probably means that the last three years’ continuous increase in employment has ceased for the time being. The number of hours worked. The decline in the future need for recruitment occurred predominantly in the largest firms. Percent of the labour force Women Men Seasonally adjusted quarterly values. which became stronger during the autumn. Unemployed. 2 If. since official seasonally adjusted data have not yet been produced. Job openings 90 80 70 60 50 40 30 20 10 0 2001 2002 2003 2004 2005 2006 2007 2008 Employed women Seasonally adjusted quarterly values. Thousands Employed men Source: LFS Data up to and including fourth quarter 2008 The number of job openings. or those with more than 200 employees. Thousands Source: LFS Data up to and including fourth quarter 2008 Unemployment has increased more for women than for men. These data are not available in Statistics Sweden’s statistical database. however. which reflects the sex distribution among industries. the decline is larger. like in the national accounts. ages 16–64 by sex 250 Seasonally adjusted quarterly values. had not yet led to any dramatic change in employment or unemployment in the fourth quarter. Seasonally adjusted data1 indicate a minor decline in employment2 from the third quarter and an increase in relative unemployment one quarter earlier. Labour Force Survey (LFS) data for the first month of 2009 confirm that a decline in employment and an increase in unemployment are under way. However. according to seasonally adjusted data from the survey on job openings and unmet labour demand. The number of job openings. has been slowly declining since the beginning of 2008 and fell rapidly during the last quarter. ages 16–64 by sex 2 400 2 300 2 200 2 100 2 000 1 900 0 2001 2002 2003 2004 2005 2006 2007 2008 9 8 7 6 5 4 3 2 1 0 2001 2002 2003 2004 2005 2006 2007 2008 Relative unemployment. 2001 2002 2003 2004 2005 2006 2007 2008 Source: LFS Data up to and including fourth quarter 2008 17 The Swedish economy – published March 2009 . Thousands Unemployed men 200 150 100 50 0 Source: The survey Data up to and including fourth quarter 2008 on job openings and unmet labour demand Unemployed women Neither employment nor unemployment have yet reached the levels of the previous downswing around 2004. ages 16–64 by sex Seasonally adjusted quarterly values. Employed. a worsening state of the labour market is clearly visible. only those employed in Sweden are counted. The difference in time is because of the continuously increasing labour force. is close to the lowest level of 2004.Labour market Disturbing state of the labour market The economic crisis. which usually 1 All seasonal adjustment has been done using Demetra (Tramo/Seats) with default adjustments.

there is a tendency for employers to give more notices to permanently employed people than they are actually going to carry out. which incidentally has been going on largely uninterruptedly since the beginning of 2007. follows the development of employment this time. from about 14 000 in the second and third quarters to about 57 000 in the fourth quarter. Exits from the labour market into studies or early retirement are to some extent complementary to an increase in unemployment. Source: The Swedish Data up to and including fourth quarter 2008 Public Employment Service The notices primarily concern permanent employees. Notice of lay-offs Thousands 60 50 40 30 20 10 0 2001 2002 2003 2004 2005 2006 2007 2008 Q3 Q4 2006 Source: LFS Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2007 2008 Data up to and including fourth quarter 2008 The manufacturing industry and the public sector declined most The worsened state of the labour market is all but surprising. the number has increased from the middle of 2008 (see the table below). which goes well with the time needed for transforming a general notice into dismissals of specific people. If the large number of notices in the fourth quarter is carried out. dismissals of fewer than five employees do not have to be preceded by notices. Therefore. which measures the number of employees (excluding the self employed). The number of notices during quarter one and two was just below 15 000. Flows between different groups in the labour market Percent change from corresponding quarter previous year 60 50 40 30 20 10 0 -10 -20 -30 Permanent employees Permanent employees Temporary employees Temporary employees Unemployed Not in LF Unemployed Not in LF Source: LFS Data up to and including fourth quarter 2008 The number of people outside the labour force increases along a trend. Temporary employees are always hit stronger in the beginning of a downswing. The number of notices of lay-offs increased. there is a risk of a dramatic increase in the number of dismissals in the near future.declines earlier than the number of employees when the business cycle turns downwards. the connection between the number of notices and the number of unemployed is weak. Simultaneously. According to seasonally adjusted data from the firm-based short term employment survey. Following a decline from the beginning of 2007. rapidly at the end of 2008. The manufacturing industry has experienced a marked decline in new orders since the beginning of 2008 and the degree of capital utilisation has gone down during the last three quarters to the lowest level since 1992. If a two quarter lag between notice and dismissal is taken into account. Hours worked Seasonally adjusted quarterly values. according to data from The Swedish Public Employment Service. This is still a smaller decline than the one in the public sector. employment in the goods producing industry has declined by more than one percent from the previous quarter. Millions of hours per week 140 138 136 134 132 130 128 126 0 2001 2002 2003 2004 2005 2006 2007 2008 curs with a two quarter lag. primarily because of the increasing population and the rising average age. Also. Unemployment also hits permanent employees The flow statistics from the LFS show that the number of people with permanent employment that have become unemployed has increased substantially during the last two quarters of 2008. since their positions can be terminated as soon as the agreed employment period ends. the outflow of people from permanent employment into unemployment or out of the labour force during the last quarter reflects this increase in notices. The strongest statistical correlation between the number of notices and the increase in unemployment ocThe Swedish economy – published March 2009 18 .

1 73. the number of employees has decreased in all regions except for Stockholm and north central Sweden.6 -0.0 75.0 8.5 72.4 76. This is the largest number in the 21st century.2 -0.There were almost 8 400 employees whose employers had gone bankrupt during the fourth quarter.4 -1.1 8.2 -1.0 74. not in the beginning.6 5.6 Upper Middle North East Norrland Norrland Middle Middle Sweden Sweden Stockholm West Småland South Sweden and the Sweden islands Percent change.5 74. A part of this decline surely consists of a transfer of personnel to service companies. seasonally adjusted values 1.0 74.7 74. The largest relative decline (5.2 75.4 6.5 The development of employment in different parts of the country is highly connected to the industrial structure.6 7.0 74.8 6.0 -0.Services Business Transport sector facturing tion services Source: Short Term Employment Development of a few indicators of the state of the labour market Year Employ- Employment Unemploy- Quarter ment share of ment ages 16–64 population ages 16–64 ages 16–64 Thousands Percent Thousands 2004 2005 2006 2007 2008 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 4 175 4 262 4 312 4 227 4 178 4 269 4 335 4 268 4 234 4 331 4 434 4 365 4 338 4 446 4 543 4 452 4 421 4 509 4 567 4 440 73.1 6.2 77.8 73.5 5.4 75.2 0.7 77. the motor vehicle industry was one of the industries where employment decreased the most. considering the recent alarming reports from the car industry.7 %) occurred in the wood and paper products industry.2 6.6 74.0 -1.0 -0.Construc.5 7. Not surprisingly.5 6.1 73.5 0.8 -1.7 365 398 348 325 364 399 337 327 358 379 302 282 315 328 265 259 291 318 272 293 Relative unemploy.0 8. The number of employees in the fourth quarter compared to the third quarter 2008 by industry Percent change.0 6.5 -1.5 7.0 -1. The construction industry and the service producing industries continued to increase their employment.0 0. while it held only 27 percent of the employment in the manufacturing industry. During the fourth quarter. It is worth noting that the number of bankruptcies is usually the largest at the end of a recession. seasonally adjusted values Source: Short Term Employment Contact person: Claes-Håkan Gustafson.6 6.1 74. 019-17 61 19 Total Business sector Public Manu.9 5.8 76. More than half of the notices in the manufacturing industry during the fourth quarter concerned the motor vehicle industry. The negative development is mainly due to fewer employees in the public sector. ment ages 16–64 Percent 8.1 75.4 -0.2 Outside labour force ages 16–64 Thousands 1 182 1 071 1 080 1 197 1 213 1 096 1 101 1 190 1 209 1 112 1 098 1 200 1 205 1 096 1 073 1 182 1 196 1 091 1 086 1 209 Hours worked ages 16–64 Job Notices of openings dismissal Thousands Thousands Thousands 128 620 131 450 111 910 134 230 129 660 137 110 115 460 138 430 137 590 132 820 119 050 141 180 141 610 137 730 122 550 144 550 138 410 146 700 121 770 144 400 36 41 37 36 38 46 38 45 49 48 44 45 53 61 52 52 57 55 48 36 17 17 13 14 18 13 10 11 10 8 8 11 9 6 7 8 9 15 14 57 19 The Swedish economy – published March 2009 .1 7.8 8. The number of employees in the fourth quarter compared to the third quarter 2008 by region (NUTS 2) 0.2 7.

Another conclusion was that the main explanation for the increase was not increased lending to Swedish households and companies but a strong growth of lending abroad. With unexpected swiftness. banks and non-financial enterprises have had obvious difficulties to get credits from abroad. Late Summer 2008 the crisis was accentuated further when first the U.S. The American car industry faced urgent problems that spread all over the car industry globally. Other half-year statistics on developments in the financial sector are now available through the banking statistics of Statistics Sweden and the Riksbank. As the credit losses on such loans began to be large and the extent of the lending became obvious. investment and growth. Few countries in the industrialised world have escaped the ravages of the crisis. See. the crisis was spread to the whole of the traditional manufacturing industry. Perhaps Sweden was better equipped than most countries to meet the financial crisis and slowdown in the Background In the last issue of the Swedish Economy the recent decade’s development of the Swedish banking sector’s balance sheet was described. The actions of the Riksbank and other governmental actions are given particular attention in the article. At an aggregate level.S. In Sweden. which clearly show that the crisis has had an effect on the balance sheets. The business sector still seems to have been able to maintain funding. more or less aware. In this article. Large staff reductions followed and like the ripples of a waterdrop. Now the effects spread and were seen throughout the global financial system. In addition. The statistics provide no clear answer to whether the nonfinancial companies have been faced with a credit collapse or not. The increase has been sharp since 2003 when the banks’ balance sheets in absolute terms almost doubled. had come to be exposed to these American mortgage loans. behind the aggregates of banks’ lending and borrowing there are several underlying components. data on financial flows from the balance of payments statistics are available. which also help to highlight the financial crisis during the second half of 2008. The distrust between banks and other financial institutions resulted in an almost collapsed interbank market. Governments and central banks set up massive measures of support that were both focused on nationalisation of banks and various types of loan facilities. However. it was found that the volume expansion of the banking sector is likely to have passed its peak and that the banking sector is likely to shrink in the tracks of the financial crisis. which unfortunately is not as well illuminated statistically. These amortizations did not have an equivalent affect on the banks’ balance sheets since the Swedish krona at the same time depreciated strongly relative to other currencies. and Europe the banking crisis became apparent. a deep worry in the financial sector was spread. In the U. the financial crisis had immediate impact in the real economy. the effects on banks and corporate balance sheets are so far relatively small. a description of the financial crisis’ origin is made and how it is reflected in various financial statistics from banks and other sectors. From 1980 until mid-2008 total assets rose from 120 to 280 percent of GDP. Paradoxically. A global mistrust between different financial players arose. A sector of the economy. and in September Lehman Brothers went into bankruptcy. Media reported that these companies are strongly affected by the credit tightening from both banks and the international capital markets. The drop in Swedish GDP is an expression of this. The Swedish economy – published March 2009 20 . page 17 of “The Swedish economy – statistical perspective” No 3 2008 for a more precise definition. e. the picture was about the same as in the rest of the world. measures taken by the Riksbank and the Swedish government have highly contributed to the maintenance of credits. however. Initially. Finally. is the non-financial companies. the crisis is not reflected as clearly in the financial statistics. Thirdly. The difference in the financial sector’s growth in relation to the development of the real economy (GDP) has thus increased considerably in recent years. Firstly. a considerably shorter perspective of primarily the banking sector1 and part of other sectors’ balance sheets will be studied. banks and mortgage institutions. but it has probably happened at high costs and some categories have most likely been superseded by larger and more creditworthy companies.Financial crisis as seen in statistics Statistics suggest a relatively well-functioning credit market The financial crisis developed very quickly into a real economic crisis that almost immediately had an impact on demand. Secondly.g. 1 The banking sector means what is known in the statistical classification as MFIs (excluding Riksbanken) that is to say. the difficulties for banks and mortgage institutions to refinance their securities borrowing abroad resulted in extensive amortizations of approximately 400 SEK billion during September-November 2008. government took over mortgage institutions Freddie Mac and Fannie Mae. How is this reflected in the statistics? The crisis’ roots The so called subprime crisis in the United States spread quickly to the rest of the world through the complex network of financial instruments and investors who.

Most probably the banks’ borrowing should have continued to increase unless the interbank market ceased to work normally at the same time as other channels of credits also were closed. however. albeit at a fairly slow pace. In August 2008 the total currency borrowing by debt securities amounted to nearly SEK 1 400 billion (graph below). The household sector demand for housing financing has especially driven the last few years’ increase in the banking sector borrowing via debt securities. others are described in a less coherent manner. This led government and Riksbank to take a host of measures simply to ensure the functioning of the financial markets. A further breakdown of the statistics is needed to better reflect the economic crisis’ impact on financial markets. they tend to level off. The fourth quarter GDP figure with a growth reduction of almost 5 percent shows that the financial crisis also very quickly turned into a real economic crisis. Not least. When the krona is weakening as it Lending Shares and equity Debt securities Other assets Within the banks liabilities no dramatic changes is shown as a result of the economic crisis. institutions and companies. The graph shows that the decrease was primarily due to the short-term certificates maturing and that the banks simply could not get new loans. 21 The Swedish economy – published March 2009 . The authorities’ actions will be described later in this article. This is not possible to illustrate only on the basis of these statistics. The reduction of the outstanding debt securities portfolio of over SEK 200 billion would have been much larger if it was not for the weakening of the Swedish krona during the autumn and winter. Deposits and borrowing show a steady increase over the last six months. Banking sector issues of debt securities have become an increasingly important source to finance loans to households. The increasing difficulties for the banks to get liquidity threatened to rapidly drain the firms and households’ access to credit. this was reflected in the Swedish housing market that worked very well until September 2008. Banks' assets SEK billion 12 000 10 000 8 000 6 000 4 000 2 000 0 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -07 -08 Data up to and including December 2008 Source: Financial market statistics The value of securities borrowing declined somewhat in line with the growing difficulties to obtain loans on international capital markets. Banks' liabilities SEK billion 12 000 10 000 8 000 6 000 4 000 2 000 0 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -07 -08 Data up to and including December 2008 Source: Financial market statistics Deposits Other liabilities Debt securities Equity What happened in the banks’ balance sheets in autumn 2008? On an aggregated level it is difficult to infer any obvious effects of the financial crisis in the balance sheets of the Swedish banks and mortgage institutions.global economy. But in the autumn the financial crisis also affected the Swedish banks and other credit institutions with full force. During the last months of the year. The spread to the real sector was almost brutal and there was a grinding halt in major parts of the manufacturing industry due to rapidly falling demand. a number of events that may be worth highlighting emerge. The Money and Banking statistics show that the value of banking sector lending during the autumn and winter of 2008 continued to increase. Another immediate consequence of the emerging crisis was a more or less total stop for the banks to finance themselves through debt securities in the international capital markets. During the period September to November the stock of securities was reduced to SEK 1 170 billion. One of the first effects of the financial crisis was that the interbank market for lending and borrowing almost ceased to function. It can be concluded that the growth in banks’ balance sheets appear to have slowed down. and especially not illustrated in figures. Neither the value of the banking sector’s shares or debt securities changed dramatically during the period. Despite the depressed growth in balance sheets it still seems as if the banking sector has worked more or less normally in the autumn and winter. Several phenomena are widely known. Banks’ borrowing When disaggregating records of the banks’ balance sheets and combining the Money and Banking statistics with other statistics.

leaving collateral in the form of securities. This increase was even more significant because most of the non-financial companies faced the same closed door for international securities borrowing and consequently the pressure on credit from the banks increased even more. this time in SEK with a maturity of three or six months.continuously has done since the crisis began in September. At the same time additional loans of USD 10 billion were offered. The excess liquidity that thus occurred in the banking system was in 1 The Riksbank borrows foreign currency for a fixed duration. Certificates Bonds Source: Financial market statistics Data up to and including December 2008 While the door was closed during the early autumn for banks to borrow abroad. The large addition of SEK from the Riksbank led to excess liquidity for the banks that needed to be reinvested in the Riksbank. This is a way to provide additional liquidity through the use of existing securities. For instance. the debt in foreign currencies. because virtually all debt securities borrowing in foreign currency are swapped to Swedish kronor. expressed in Swedish kronor. so-called repurchase The Swedish economy – published March 2009 22 . These certificates were at fixed interest rates (repo rate) and have 7 days duration. This led the government and the Riksbank to take a variety of measures to guarantee banks’ access to capital and hence the enterprise and household needs for loans. Quick action by the Riksbank and National Debt Office In mid-September the Riksbank began to increase the liquidity of its foreign exchange reserves by borrowing foreign currencies with securities as collateral. It seems therefore that the market for securities borrowing eased slightly in late 2008. was able to issue both bond and certificates during the month (see also below in the review of the authorities’ actions during the crisis). 2 A classic “flight to quality” arose and investors rejected securities of mortgage institutions in favour of safe government securities. tried to remedy. December and also since the end of the year. the balance sheet of the Riksbank since the end of August 2008 has increased from approximately SEK 200 billion to SEK 700 billion by the end of the year. to issue short-term treasury bills in order to offset the lack of government securities2 that arose during the first month’s turbulence. The effects of all actions can be seen in the table below. In December 2008 the debt increased slightly again. the decline was 210 billion. At the same time. if the krona exchange rate had remained unchanged during that period. At the end of the month. non-financial enterprises’ demand for bank credits increased. The alternatives for these reinvestments were either in the form of deposits (fine-tuning operations) or investments in Riksbank certificates. At the end of the month. it depends on the continued weakening of the krona and that some banks were able to issue both bonds and certificates during the month. The arrangement was aimed to provide loans in USD to banks. In October the Riksbank offered additional credit facilities to banks. In a first step. outflows of capital from the banking sector at more than SEK 400 billion. Again. in consultation with the Riksbank. 4 The Swedish Financial Supervisory Authority “Effekterna av de statliga stabilitetsåtgätderna”. In a number of so-called auctions over SEK150 billion were lent. the banks’ liabilities should have decreased by more than 400 billion kronor. In assets it can be clearly seen how the Riksbank’s loans in SEK to banks increases from virtually zero to SEK 266 billion. The balance of payments statistics reported in the period September to November. Second Report in 2009. As a result. the Riksbank continued to offer loans in SEK and foreign currency to the banking system. One bank. the establishment of a currency arrangement (swap facility)3 with the Federal Reserve. treasury bills of SEK 50 billion were issued but the NDO announced that the issued volume could be extended to SEK150 billion. the Riksbank announced. after discussion with the Riksbank. In total. Banks' securities issues in foreign currency SEK billion 1 600 1 400 1 200 1 000 800 600 400 200 0 2005 2006 2007 2008 agreements1. the government introduced the state guarantee scheme for banks and housing institutions medium-term borrowing. 3 The Swap Facility with Federal Reserve means that the Riksbank briefly borrow USD in exchange for SEK. In other words. it has led to Swedbank in the winter being able to issue certificates and bonds for nearly SEK 200 billion4. automatically increases. The high demand for treasury bills resulted in a shortage situation that the National Debt Office. together with the Norwegian and Danish central banks among others. An acute liquidity shortage for households and businesses threatened. with the support of the government guarantee program. the Swedish National Debt Office (NDO) decided. During November. this swap arrangement corresponded to USD 30 billion. The liquidity NDO received was lent to the market through reverse repurchase agreements with guaranteed housing securities as collateral. (Not translated to English). and thus are protected from exchange rate changes. It must be noted that this is not about banks making large exchange rate losses. Instead. This was a measure to give banks an opportunity for funding in the longer maturities and at lower cost than was possible in the market.

It is quite probable that the USD loan from the Riksbank has significantly replaced the banks’ loss of securities borrowing. Source: Financial market statistics Data up to and including December 2008 What do statistics say on corporate credit crunch Banking sector lending to the non-financial corporate sector throughout 2008. through the swap facility with Fed. Riksbank lending in USD to major banks SEK billion 250 200 150 100 50 0 Gold Foreign exchange reserves Lending in USD Lending in SEK Other assets Total assets Liabilities Banknotes and coins Fine-tuning operations Debt certificates issued Liabilities in SEK (Fed) Other liabilities Capital and reserves Total liabilities Source: Sveriges Riksbank SEB Nordea Danske bank Swedbank Oct -08 SEB Nordea Danske bank SEB Nordea Danske bank Swedbank Nov -08 Swedbank Dec -08 The USD liquidity that the Riksbank added to the banks is shown under lending in USD. As mentioned above. Does that mean that the dour headlines about the credit collapse of the non-financial companies are exaggerated? If you add the fact that the Swedish companies actually have increased their deposits in the banking system during the same period. is reinforced. has been stable. among other things. Overall. the value of loans increased by about 1 percent per month. Banks lending and deposits vis-a-vis nonfinancial corporations 2008 Percent change compared to previous month 15 12 9 6 The major banks’ borrowing from the Riksbank The Money and Banking statistics present information on individual banks that took part of the Riksbank’s lending in the autumn. items that can be seen in the liability side. it concerns loans in both USD and SEK. mainly USD. their borrowing amounts to over SEK 400 billion of which approximately half are in foreign currency. further information is needed about their access to financing abroad. The Riksbank’s assets and liabilities SEK billion Assets Aug 31 -08 25 174 0 1 4 204 107 0 0 0 38 59 204 Dec 31 -08 30 200 196 266 7 700 112 207 49 189 84 59 700 Change 5 26 196 265 3 496 5 207 49 189 56 0 496 Swedbank and Danske Bank Sweden Branch are the institutions that have borrowed the most from the Riksbank. then the image of a business sector that both can obtain loans from banks and also have relatively large funds invested in bank accounts. The graph shows that all major banks have raised loans in the Riksbank. including the fourth quarter 2008. Riksbank lending to major banks SEK billion 450 400 350 300 250 200 150 100 50 0 Deposits Lending SEB SEB SHB Nordea Danske bank Swedbank Oct -08 SEB SHB Nordea Danske bank Swedbank Nov -08 SHB Nordea Danske bank 3 0 -3 -6 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Data up to and including December 2008 Swedbank Dec -08 Source: Financial market statistics Source: Financial market statistics Data up to and including December 2008 In order to better form an opinion on any funding difficulties for the corporate sector. The palette of action by the Riksbank and the government has made the banking sector able to obtain capital satisfactorily and thus to have been able to maintain lending to firms and households. On average. Handelsbanken is the only major bank that did not need to borrow in USD. the corporate 23 The Swedish economy – published March 2009 . can be seen under liabilities in USD.part invested in Riksbank certificates but mostly over-night in fine-tuning operations. while the Riksbank’s funding. Statistics Sweden’s balance sheet statistics show.

The Riksbank states. The crisis will most likely in the near future have an impact on banking sector profits. This is not particularly surprising. It appears that the value of both types of loans has increased during the autumn of 2008. In large part this was replaced by loans from the Riksbank. The statistics show among other things that during September to November 2008 there was a near-halt for securities borrowing abroad for the Swedish private sector. that the corporate sector may face problems later on with refinancing their existing loans. that most companies interviewed so far have managed to get loans in different ways. Financial statistics of banks and enterprises have thus come to reflect just that. statistics give no evidence so far that the companies have been forced to repay their securities lending. On the other hand. the crisis comes back to the financial sector Some effects of the economic crisis in financial aggregates have been shown in this article. Media often highlight how especially small and medium-sized companies have had difficulties with the external funding. states that every two interviewed companies indicated that access to external financing has deteriorated in the fourth quarter of 2008. this is not particularly clear in the financial statistics. It means. For the The Swedish economy – published March 2009 24 . on the other hand. Non financial corporations' loans from abroad SEK billion 350 300 250 200 150 100 50 0 Q4 -06 Q1 -07 Q2 Q3 Q4 Q1 -08 Q2 Q3 Q4 vast majority of Swedish companies issuing securities abroad no new borrowing has taken place. “This applies particularly to the large companies” the Riksbank points out. It has apparently been “windows” on the capital markets for new issues that probably have been open only for a very small number of creditworthy companies. Rapid action by the government and the Riksbank has facilitated banks maintaining a relatively well-functioning credit market. but were declined by creditors. Banks amortized over SEK 400 billion during the period. The Riksbank. But aside from the exchange rate. It appears that the international capital markets have eased somewhat in late 2008 and early 2009. it will have larger impact on banks and corporate balance sheets in the coming years. since the stock of corporate loans is mainly long-term and very few loans seem to have matured during the autumn. it appears that the non-financial companies have not either been hit by a credit crunch from foreign creditors. however. are those loans the enterprises would like to have. This means that there may be a crowding out effect. The upturn in the fourth quarter of the companies’ securities lending abroad is explained by that exchange rate effect and a few major issues of a very limited number of companies. This has for example offset the above mentioned amortizations of securities. What is not reflected in statistics. thereby “taking precedence in the queue”. At first sight. of course. a weaker SEK increases the value of foreign currency liabilities and distorts our interpretation somewhat. where the major Swedish companies increasingly have turned to their Swedish home market for loans. Again it is the larger companies that dominate as regards the ability to get capital through the issuance of securities abroad. Non financial corporations' securities issues abroad SEK billion 300 250 200 150 Certificates Bonds Short term Long term 100 50 0 Q4 -06 Q1 -07 Q2 Q3 Q4 Q1 -08 Q2 Q3 Q4 Source: Non financial Data up to and including fourth quarter 2008 corporations – short term assets and liabilities In a second wave. However. The sharply weakened SEK since September last year has meant that both assets and liabilities in foreign currency have risen in value. Source: Non financial Data up to and including fourth quarter 2008 corporations – short term assets and liabilities It is difficult to deduce from the statistics whether there are categories of companies that have had extraordinary difficulties with the credit supply. The economic crisis will last for some time. in its publication “The Riksbank’s company interviews in December 2008 – January 2009”.sector borrowing from abroad. Probably. Again. not least by increasing credit losses. both through securities and conventional bank loans. regardless of financial means. we have not seen any significant net repayments of corporate borrowing abroad. This is most likely also a fact. Various studies and the media testify that the non-financial companies have been facing great difficulties in getting credit during autumn and winter.

it can be said that the financial crisis originated in the financial sector. 08-506 949 09 25 The Swedish economy – published March 2009 . In this article no review has been made of the Swedish banks’ exposures to the Baltic countries. It went on very rapidly to also become a real economic crisis. for example. In a second wave. It is noted that the impact of the crisis has been more clearly reflected in the real economic statistics. Contact person: Anders Lindström. profits dropping and probably declines in assets and liabilities. There may be reasons to come back with a more detailed description of developments in the Baltic countries and other more country-specific exposures from a balance sheet and income perspective. One possible conclusion of the article can thus be that the financial statistics are not sufficiently sophisticated to quickly reflect the effects of a financial crisis but that it rather can contribute to the analysis and also may indicate that. the claims of the Swedish banks in the Baltic area are about SEK 700 billion. financial imbalances are built up nationally as well as globally. the crisis comes back to the financial sector with loan losses.A bit speculatively. How this will turn out in statistics and in other ways remains to be seen. or of the banks’ profits and losses incurred. In the current situation.

Financial markets 08-506 949 09 Graphic format and web publishing: Monica Andersson Arne Orrgård 08-506 943 62 08-506 950 73 Inquiries also by e-mail: first name.surname@scb.Publisher: Monica Nelson Edberg For more information on this publication. please contact: Leif Munters.se. editor Caroline Ahlstrand Bo Bergman Claes-Håkan Gustafson Hans-Olof Hagén Eva Hagsten Vera Norrman Bo Sandén Tomas Thorén 08-506 945 09 08-506 943 33 08-506 945 42 019-17 61 19 08-506 944 66 08-506 942 27 08-506 943 04 08-506 946 94 08-506 941 46 Co-authors: Anders Lindström. The Swedish economy – Statistical perspective ISSN 1653–3828 URN:NBN:SE:SCB-2009-A28TI0901ENG_pdf (pdf) 26 .