(Bloomberg) -- Swedish retail sales slumped the most on record in February as soaring inflation and rising credit costs continue to take their toll on the Nordic region’s biggest economy.
Last month’s retail sales fell 9.4% from a year earlier, led by a decline in durable goods, data from Statistics Sweden showed on Wednesday. The fall was the biggest on record dating back to 1992 when the country underwent a banking and property crisis.
Swedish consumers are pulling back from spending amid the fastest underlying inflation in more than 30 years that’s worsened by a weak krona and continued interest-rate hikes by the central bank. Gross domestic product shrank 0.5% in the fourth quarter, suggesting the economy has already entered a recession.
Read More: IMF Expects ‘Mild’ 2023 Recession in Sweden as Spending Slows
“The current bout of inflation is clearly putting the retail sector under mounting pressure,” Nordea’s economist Gustav Helgesson wrote in a note to clients. “Parts of the retail sector are already in a recession. Today’s report reinforces our view that private consumption will contract this year.”
The data for February follows announcements by three of Sweden’s leading grocers earlier this week that they will cut prices after the fastest food-price inflation since the 1950s prompted calls for price caps and a summons by the country’s finance minister.
Read More: Swedish Grocers Pledge Price Cuts After Soaring Food Inflation
--With assistance from Joel Rinneby.
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