Sweden has reported better than expected economic expansion in the first quarter, as the GDP grew by 1.4% beating 1% estimates higher by 3% on the year, while last quarter's contraction was revised to the upside to 0.4% expansion.

The Nordic countries economy was backed mainly by the revival of exports. Giants such as Ericsson AB, the world's largest vendor of telecommunication equipment, and Volvo AB, second largest truck maker in the world, as well as Assa Abloy, world's pioneer in lock making, all recorded higher profits in the first quarter. It is interesting to note that exports contribute to as much as half of national output in Sweden.

Low interest, 0.25%, also contributed to the expansion, while on the fiscal side the country stands the strongest among European countries. Sweden recorded the lowest budget deficit in the old continent, at 0.5% of last year's GDP, thus excluding the need for harsh fiscal measures adopted in other European countries. Though, the main challenge still remains unemployment, which surged to 9.8% in April.