Key retail banking products such as residential mortgages and credit card spending are set to decline in Sweden over the coming months due to declining consumer confidence and social distancing measures as a result of the COVID-19 pandemic, according to GlobalData, a leading data and analytics company.

GlobalData expects credit card loans in the country to plummet to -3.5% growth in 2020, compared to 0.9% pre-COVID-19. However, this is set to be a short-term hit as the company forecasts growth to bounce back to 1.4% in 2021, higher than the 0.8% figure forecasted before the pandemic. Similarly, growth is still expected to be higher in the final year of GlobalData’s forecasts, as the company expects to see growth of 0.9% in 2023, compared to 0.6% previously.

Ravi Sharma, Banking and Payments Analyst at GlobalData, comments: “COVID-19 will see a massive drawdown on existing credit lines. As a result, personal loan applications will also see a drop in 2020 as consumers cut back on discretionary spending and become more cautious about taking on additional liabilities, due to economic uncertainty.

“Although there will be an overall rise in credit card transactions in 2020, due to consumers looking to avoid cash, the pandemic is set to hamper value growth. COVID-19 will cause a shift in spending behaviors as wary consumers cut-down on non-essential purchases.”