FX.co ★ Sweden’s GDP Contraction Deepens in January, Signaling Fragile Start to 2026

Sweden’s economy showed further signs of weakness at the start of 2026, with gross domestic product (GDP) falling more sharply on a month-over-month basis. According to the latest data updated on 10 March 2026, GDP declined by 1.1% in January 2026 compared with the previous month, a steeper drop than the 0.7% month-on-month contraction recorded in December 2025.

The figures indicate that the downturn is intensifying rather than stabilizing. The December 2025 reading of -0.7% reflected the change from November to December, while the January 2026 print of -1.1% captures the shift from December to January. On this comparison basis, the Swedish economy has moved from a moderate monthly contraction into a more pronounced decline, underscoring a fragile macroeconomic backdrop as the year begins.

Market participants and policymakers are likely to view the acceleration in the GDP decline as a warning sign for Sweden’s short-term growth prospects. With two consecutive months of negative month-over-month readings and a deeper fall in January, attention will focus on upcoming data releases to assess whether this marks a temporary dip or the onset of a more prolonged slowdown in activity.