GDP growth set to slow in Q2

Q1 GDP data for Switzerland and the Nordic economies were a mixed big and proved the adage that the devil is in the detail. Switzerland and Sweden both posted the same headline growth rate (0.6% q/q). But while the breakdown of the former’s growth was broadly encouraging, the gain in Sweden was flattered by a sharp fall in imports. Meanwhile, the 0.3% increase in mainland Norwegian GDP in Q1 was weaker than we had expected but was skewed by a temporary weather-related fall in electricity production and a decline in investment after a very strong Q4. Looking ahead, surveys suggest that Q1 will be as good as it gets for quarterly GDP growth in Switzerland and Sweden this year and that the Norwegian economy will continue to outperform its Nordic peers. As a result, we expect the Norwegian krone to rise against its Swedish counterpart over the second half of this year.