Sweden's Q1 GDP: vs. Korea and Japan

Sweden's Economy: A Tentative Step Forward in Q1 2025

Sweden's economy in the first quarter of 2025 presented a mixed picture, with a slight decrease in GDP compared to the previous quarter but a modest increase year-on-year. While not a strong rebound, this performance offers a glimmer of hope after a period of economic stagnation. The recovery, though slow, is primarily driven by specific components of the economy.

 

 Understanding Sweden's Q1 2025 GDP Performance

The latest data from Statistics Sweden (SCB) indicates a nuanced economic situation for Sweden in Q1 2025.

 

 Key GDP Figures

•  Seasonally adjusted, GDP decreased by 0.2 percent in Q1 2025 compared to the previous quarter (SCB).
•  However, when adjusted for calendar effects and compared to the first quarter of 2024, GDP increased by 0.9 percent (SCB).

 

 Drivers of the Economy

Despite the quarterly dip, certain sectors and factors contributed positively:

•  Net Exports: Exports rose by 1.8 percent and imports increased by 0.3 percent, leading to a positive contribution of 0.8 percentage points to GDP growth from net exports (SCB). This suggests that Sweden's external trade performance has been a significant counteracting force against a more substantial economic downturn.
•  Household Consumption: Household final consumption decreased by 0.2 percent due to minor changes across most consumption categories (SCB). This is a slight disappointment, as previous expectations anticipated an upturn in household spending.
•  Government Consumption: General government consumption saw a slight increase of 0.1 percent, with both local and central government contributing positively (SCB).
•  Gross Fixed Capital Formation: This area saw a notable decline of 3.8 percent, primarily due to reduced investments in buildings and constructions (SCB). This suggests a continued cautious approach to long-term investments within the country.

 

 Economic Outlook and Challenges

The overall sentiment surrounding the Swedish economy remains cautious.

•  The recovery that began in the second half of 2024 has slowed down, and the Swedish economy remains in a protracted recession (Government.se).
•  Geopolitical uncertainty and global trade conflicts are contributing to subdued growth in export markets (Konjunkturinstitutet).
•  However, rising real wages and expected lower interest rates in the latter half of 2025 could provide momentum for recovery (Government.se, Konjunkturinstitutet).
•  The Ministry of Finance forecasts the recession to continue into 2027, longer than previously assessed (Government.se).

 

 A Look at Asia: South Korea and Japan's Q1 2025 Economic Performance

To put Sweden's performance in perspective, it's useful to examine the economic health of other major global players, such as South Korea and Japan, two developed countries among Asian countries.

 

 South Korea's Q1 2025 Performance

•  South Korea's real Gross Domestic Product (GDP) contracted by 0.20 percent in the first quarter of 2025 compared to the previous quarter (Trading Economics).
•  Real Gross National Income (GNI) also fell 0.4% in the first quarter, reversing gains from the prior quarter and declining for the first time in three quarters (Chosun.com). This indicates a reduction in the total income earned by South Korean residents.

 

 Japan's Q1 2025 Performance

•  Japan's GDP stagnated, showing 0 percent growth in the first quarter of 2025 over the previous quarter (Trading Economics).
•  Initial estimates had indicated a contraction, but this was revised upwards due to stronger consumer spending and private inventories (Xinhua). Data on Japan's GNI for Q1 2025 is not explicitly detailed in the provided sources, but general trends align with GDP performance.

 

 Comparative Economic Overview: GNI and GNI Per Capita

While GDP focuses on production within a country's borders, Gross National Income (GNI) measures the total income earned by a country's residents, regardless of where the income is earned. GNI per capita then divides this total by the population, offering insight into the average living standard.

 Definitions

•  Gross National Income (GNI): The sum of incomes of residents of an economy in a given period. It equals GDP plus primary income receivable from non-resident units, minus primary income payable to non-resident units (Eurostat). Essentially, it's about who earns the income.
•  GNI per capita: The GNI divided by the mid-year population, often converted to US dollars using a standardized method like the World Bank Atlas method (Destatis.de). This is a key indicator of a country's average standard of living.

 

 GNI and GNI Per Capita Comparisons (2024 data where available)

 Sweden:

• GNI per capita (current international $ PPP) was reported at $74,150 in 2024 (Trading Economics, World Bank).
•  Nominal GNI per capita in 2024 was around $58,820 (Wikipedia). This places Sweden among high-income economies, reflecting a strong average earning power for its residents.

 

 South Korea:

• South Korea's GNI per capita reached $36,624 in 2024, an increase of 1.2% from 2023 (Korea.net).
• This figure allowed South Korea to surpass Japan and Taiwan in GNI per capita for the second consecutive year among major economies with populations over 50 million (Anadolu Ajansı). The growth in GNI per capita indicates an improving average living standard for South Koreans.

 

 Japan:

• Japan's GNI per capita (current international $ PPP) was reported at $55,120 in 2024 (Trading Economics, World Bank).
• Nominal GNI per capita was estimated at approximately $34,500 in 2024 (Anadolu Ajansı). Japan's GNI per capita has recently been surpassed by South Korea, partly due to the depreciation of the Japanese Yen relative to the Korean Won (Anadolu Ajansı). This suggests a more challenging period for average income growth in Japan compared to South Korea.

 

 Conclusion

Sweden's Q1 2025 GDP data, while not a booming success, shows resilience, particularly in net exports. Despite a quarterly contraction, the year-on-year growth provides a foundation for future recovery. Compared to South Korea and Japan, which also experienced subdued or contracting growth in Q1 2025, Sweden's situation reflects broader global economic uncertainties. Looking at GNI and GNI per capita, Sweden maintains a higher average income level, while South Korea has shown notable growth in this metric, surpassing Japan. The path to a full recovery for all three nations, driven by potential increases in household consumption and investments, will depend on both domestic policy and global economic stability.

 

 FAQ

Q: What were the main drivers of Sweden's GDP in Q1 2025?

A: Net exports were a significant positive contributor, while household consumption slightly decreased, and gross fixed capital formation saw a notable decline (SCB).

 

Q: Did Sweden's GDP grow in Q1 2025?

A: Seasonally adjusted, Sweden's GDP decreased by 0.2% compared to the previous quarter, but increased by 0.9% when compared to the first quarter of 2024 (SCB).

 

Q: How did South Korea and Japan's economies perform in Q1 2025?

A: South Korea's GDP contracted by 0.20%, and Japan's GDP stagnated at 0% in Q1 2025 compared to the previous quarter (Trading Economics). South Korea's real GNI also fell in Q1 (Chosun.com).

 

Q: What is the difference between GDP and GNI?

A: GDP measures the total value of goods and services produced within a country's borders, regardless of who produced them. GNI measures the total income earned by a country's residents, both domestically and from abroad (Eurostat).

 

Q: How do GNI per capita figures compare among these three countries?

A: In 2024, Sweden had a higher GNI per capita (around $58,820-$74,150) than South Korea (around $36,624) and Japan (around $34,500-$55,120), indicating a higher average living standard in Sweden (Wikipedia, Korea.net, Anadolu Ajansı, Trading Economics).