Sweden’s seasonally adjusted retail sales fell 0.2% in July from June, reversing a revised 1.0% monthly increase after June was initially reported at 0.9%. Sales were still 2.1% higher than in July 2023, although annual growth slowed from 3.4% in June. Durable goods such as electronics and furniture led the monthly decline, while groceries and daily consumer goods rose slightly. Online retail continued to lose ground to physical stores as pandemic-era shopping habits normalized. The figures point to cautious household spending amid high borrowing costs, lingering price pressures and weaker confidence. Sweden’s central bank, the Riksbank, cut its key policy rate by 25 basis points to 3.75% in May, its first reduction in eight years, and has signaled further cuts later in 2024 if inflation remains subdued. Lower rates could support consumption, but GDP contracted in the first quarter, unemployment has edged higher and the weak krona continues to add to imported inflation. Headline CPI slowed to about 2.3% in July, near the Riksbank’s 2% target. Because private consumption accounts for roughly half of Sweden’s GDP, a durable spending recovery is likely to depend on further rate cuts and stronger household confidence.