(Bloomberg) -- Sweden’s economic output fell in April as consumers in the Nordic region’s largest economy are yet to see tangible effects of the central bank’s shift to monetary easing. 

Gross domestic product contracted by 0.7% from the previous month, according to an initial estimate published Monday by Statistics Sweden. That was a weaker outcome than expected by two economists polled by Bloomberg, both of whom had estimated an 0.2% expansion.

The data comes after Sweden’s central bank started reducing its benchmark interest rate from a 15-year high and flagged that it will continue cutting in the second half of the year. That has contributed to a more upbeat view on the outlook for the country’s economy, which has been subdued by rising borrowing costs that feed through relatively strongly as many Swedes have mortgage rates fixed on short terms. 

However, following an expansion in the first three months of the year, the economy appears to have taken one step back in the first month of the second quarter, Melker Loberg, an economist at the statistics agency, said in a statement. “The development is partly explained by a decline in household consumption and somewhat weaker private production,” he said.

Production in the business sector as well as household consumption fell by 0.4% on month in April, according to separate releases from Statistics Sweden.

--With assistance from Simbarashe Gumbo, Joel Rinneby and Mark Evans.

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