Swedish Economic Pessimism Rises Amid Global Trade Tensions

A survey by the Riksbank reveals growing pessimism among Swedish businesses concerning future economic developments. Companies are concerned about the unpredictability caused by U.S. tariffs, potentially affecting global demand. Analysts anticipate a potential policy rate cut due to weak economic activity and a stable inflation outlook.

Businesses across Sweden are growing increasingly pessimistic about the country's economic future, according to a survey released on Tuesday by the central bank, the Riksbank. Concerns chiefly stem from potential impacts of trade tensions, which businesses fear could suppress growth in the near future.

Though the effects of President Donald Trump's intermittent tariff policies have been modest so far, the uncertainty surrounding them has prompted caution among customers and complicated planning for companies, the survey indicated. Long-term concerns include possible dampening of global demand due to these trade conflicts.

Sweden's manufacturing sector saw a decline in May, while services showed slight resilience, yet both sectors hover close to the growth/non-growth threshold of 50 points in purchasing managers' indices. The prevailing economic weakness and accommodating inflation has led analysts to predict a policy rate cut at the Riksbank's upcoming June meeting.

(With inputs from agencies.)