Sweden fell into a recession in the third quarter as its economy contracted by 0.3 percent and consumers tightened their belts for a fifth straight quarter, Statistics Sweden said Wednesday.
The Scandinavian country is one of the worst economic performers in the European Union, with the European Commission forecasting average growth of 0.6 per cent in the EU in 2023.
Sweden's economy shrank by 0.8 per cent in the second quarter. A recession is usually defined as two consecutive quarters of contraction.
"The downturn is mainly explained by a decrease in inventories and reduced household consumption," the statistics agency said in a statement.
Household consumption shrank by 0.6 per cent in the third quarter from the second, while decreased industrial inventories contributed a negative 1.4 percentage points to the contraction.
The country has been struggling with stubbornly high inflation for more than a year and a depreciating krona -- prompting the central bank to successively raise its key rate to four per cent, its highest level in 15 years.
Consumers have been hard hit by the higher prices and interest rates, with many households having mortgages with variable interest rates.
The government recently expressed concern over the country's "prolonged economic winter", as unemployment rose to 7.7 per cent in the third quarter.
