Bloomberg News

Swedish Companies See ‘Great Uncertainty’ Ahead, Riksbank Says

October 04, 2011

Oct. 4 (Bloomberg) -- Swedish companies took a bleaker view on the next 12 months as the specter of a deepening European debt crisis clouds economic growth prospects across the region.

Companies surveyed by the Stockholm-based Riksbank see “great uncertainty” and most anticipate economic conditions will deteriorate over the coming year, the central bank said in its September survey. The firms interviewed also saw a “considerable risk” that new orders will fall in the period, the Riksbank said.

Sweden’s annual economic growth rate fell for a second consecutive quarter in the three months through June as Europe’s fiscal woes and faltering recovery prospects threaten trade. Sweden, which relies on exports for half its economic output, will see its gross domestic product growth slow to 0.8 percent next year, less than a third the rate in neighboring Norway, Nordea Bank AB estimates.

“The companies have therefore become more flexible in order to deal with fluctuations in demand and they believe that they are now better equipped financially than they were at the time of the crisis in 2008,” the Riksbank said. “Despite the expected downturn, the companies still plan to increase their prices at approximately the same rate as previously.”

The krona was little changed against the euro at 9.1500 as of 10:07 a.m. in Stockholm. Versus the dollar, the krona slipped 0.1 percent to 6.9500.

The survey, which is conducted three times a year, was based on responses from 40 of Sweden’s biggest companies representing about 250,000 employees. Most of the interviews were conducted from Aug. 29 to Sept. 9.

--Editors: Tasneem Brogger, Jonas Bergman.

To contact the reporter on this story: Johan Carlstrom in Stockholm at jcarlstrom@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net


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