Sweden’s year-on-year gross domestic product rose by 2.1% in the fourth quarter. This was above the forecast of 1.8%.
The result was 0.3 percentage points higher than expected. It indicates faster annual growth than the forecast for the period.
Implications For Riksbank Policy
This stronger-than-expected GDP report from late 2025, showing 2.1% growth, suggests the Swedish economy has more momentum than we previously thought. This resilience reduces the probability of imminent interest rate cuts from the Riksbank. We should adjust our positions to reflect a more hawkish central bank stance in the coming weeks.
Given this data, we see renewed strength in the Swedish krona. The latest January 2026 inflation data showed CPIF still at 2.5%, and this growth figure will only add to the Riksbank’s caution. We should consider buying puts on the EUR/SEK currency pair, as the fundamental case for a stronger krona is now more compelling.
For equity derivatives, the outlook for the OMXS30 index has improved. A robust economy supports corporate earnings, especially for cyclical and industrial companies that have driven the index’s 4% gain so far in 2026. We are looking at buying call options on the index to capture further upside.
This report forces us to re-evaluate rate expectations that were set during 2025. Looking back, the market had priced in a high chance of a rate cut by the summer, but that now seems unlikely. We remember the pattern from 2022, where strong economic data consistently pushed back against dovish central bank expectations, and this situation feels similar.
