OSLO/COPENHAGEN/STOCKHOLM: The outlook for economic growth in Sweden, Denmark and Norway has worsened since April, a Reuters poll found last week, as Europe’s economies falter while Britain’s looming exit from the European Union injected hard-to-quantify uncertainty.

Economists lowered forecasts for growth in all the three Scandinavian countries for both 2016 and 2017 compared to predictions made in April, and the outlook for the labour market has also deteriorated, the poll showed.

In Sweden, long a star performer in Europe, gross domestic product was seen expanding by a still-healthy 3.2 percent in 2016, according to the survey of 24 economists, but below the 3.4 percent seen in April.

For 2017, Sweden was seen easing to growth of 2.4 percent against 2.7 percent in the previous poll.

“The Swedish economy is likely to decelerate from the unsustainably strong growth rate last year,” SEB chief strategist Johan Javeus said.

“So far this year export performance has been a bit lacklustre and while Brexit effects and a sluggish recovery in Europe may continue to limit performance somewhat, the outlook for Swedish growth is still robust,” he added.

Oil-producing Norway, hit by the crash in the price of its main export, will meanwhile expand by only 0.9 percent this year, a downgrade from the 1.0 percent seen in April. In 2017, growth is seen accelerating to 1.5 percent, although this is three-tenths of a percent weaker than the previous forecast.

“We anticipate somewhat higher (Norwegian) growth ahead,” Swedbank Chief Economist Harald Magnus Andreassen said.

“Progress is modest as the growth in income is low while inflation is higher than we expected. Prices are growing more than wages, so consumption will only see moderate growth. We don’t anticipate a further downward spiral from here,” he added.

The fallout from the Brexit vote is not a worry for the time being, Andreassen said:

“The effects on the Norwegian economy will be marginal. But it could cause trouble if something else goes wrong in the EU and many more were to leave.”

While Norway and Sweden have both seen sharp weakening of their currencies in recent years, a development strongly encouraged by their respective central banks, Denmark has pegged itself to the euro to achieve long-term stability.

The Danish economy has only seen modest growth since the 2008-2009 financial crisis and the poll’s forecast for 2016 was cut to 1.0 percent from 1.1 percent seen four months ago, while 2017 was reduced to 1.5 percent from 1.7 percent.

Analysts have long overestimated Denmark’s growth prospects and may still be too optimistic, chief economist Steen Bocian of the Confederation of Danish Enterprise said.

The country’s long-term historical expansion rate of around 2 percent now seems out of reach, and even the Reuters poll’s average forecast of 1.5 percent growth in 2017 would be a strong outcome when compared to recent years, Bocian said. The Danish government is due to present a package of measures later this month to boost the economy. “We don’t have the same productivity growth as we did 20 years ago,” Bocian said. “There will always be trembles in the world economy, which muddies the system, that’s nothing new. The new thing is that the structural growth appears to be substantially lower than what we’ve hoped for.”—Reuters