The cost trend has peaked, and 2024 will be the year when the Swedish economy slowly turns upwards. After a period of weak economic conditions, it is now possible to see the light at the end of the tunnel. Weak economic growth in both the economy and retail is expected. In the first edition of this year's Retail Economic Report, HUI forecasts total retail sales in current prices (value) to be 1.5 percent for 2024 and 3.5 percent for 2025. In fixed prices (volume), the forecast is set at 0.5 percent for 2024 and 2.0 percent in 2025.
A brighter economic future, interest rate cuts, and new investments in the business world result in slightly revised forecasts for both the Swedish economy and retail. The rising household living costs have decreased, and the room for consumption is increasing. "2024 will be the year when a positive wind blows in the Swedish economy again," says William Lindquist, analyst at HUI Research.
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Retail sales increased by a total of 3.5 percent in 2023 and remained resilient despite the vulnerable economic situation. The expectation is for total retail sales to grow by 1.5 percent throughout the year, with food retail driving the growth. The price inflation rate in food retail has stabilized and is expected to be 1.5 percent per year for the next two years. For the trade in durable consumer goods, where many subsectors have experienced weak development in the past year, the situation is improving, and zero growth is predicted for 2024.
In 2024, continued trading with a wide range of options, with many affordable alternatives available, drives the development of consumer goods trade. Thus, there is still no end to the clear consumer focus on low prices. However, the trade in rare goods continues to struggle, but positive growth is expected for all subsectors in 2025, says Emma Hernell, CEO of HUI Research.
The positive wind that is slowly starting to blow is reflected in the forecasts for the Swedish economy. The GDP forecast remains at 0.9 percent for 2024, while there is an upward revision for household consumption from 1.0 to 1.2 percent. With expected interest rate cuts, household consumption space will also benefit further. The recovery of the Swedish economy begins throughout the year and continues into 2025, with strong predicted economic growth.