Unexpected Increase in Swedish Trade Surplus

The Swedish trade surplus in January 2006 unexpectedly reversed the declining trend we saw during 2005 . Part of this increase was a pure "calendar effect" with the number of working days being one more than January 2005. But even adjusting for that the surplus increased. This reversal was primarily due to increased export growth, rather than lower import growth. That would suggest strong Swedish economic growth in January.

It is too early to say for sure whether this was a temporary abberation or whether it represents a end to the trend of a falling trade surplus. It seems more likely than not, though, that it was just an abberation. Despite the small rate hike last week, credit-driven demand in Sweden remains strong something which should mean continued strong import growth. Meanwhile, export orders have been quite weak recently, something which suggest that export growth should slow down significantly.