(Fixes typo in headline (but, not by))
* Production down 9% in April yr/yr
* Industry down 16.6%, services 8.2%
* Figures show milder fall than expected
STOCKHOLM, June 4 (Reuters) - Private production slumped less than expected in April, despite feeling the full effects of the outbreak of the coronavirus and efforts to halt its spread, raising hopes the economic downturn in the second quarter may be milder than previously feared.
Output across all sectors fell 9% compared to the same month last year and was down 6.5% from March. Hardest hit was the industrial sector where production was down 16.6% from the same month last year. Production in the service sector was down 8.2%.
“The service sector is more resilient than we thought,” said Torbjorn Isaksson, economist at Nordea. “We, like the Riksbank, had expected GDP to fall by 10% in the second quarter, but now it looks to be better than that.”
While Sweden has not gone into the kind of total lock-down adopted across much of Europe, companies have been badly hit as domestic demand has slumped and export markets shriveled.
The government has launched measures worth around 245 billion Swedish crowns ($26.2 billion) to soften the blow to the economy while the central bank has flooded the market with liquidity to stabilise the financial sector.
Nevertheless, economists have been expecting the economy to suffer its worst slump since the start of World War Two.
Recent data, however, has given reason to doubt the gloomiest forecasts.
The economy eked out growth in the first quarter, despite the early effects of the pandemic, and while there has been a precipitous decline in activity since then, it now looks to have bottomed out.
Manufacturing and service sector purchasing managers indexes have stopped falling and confidence indicators have begun to move upwards again, if from very low levels.
Graphic on Swedish economy: tmsnrt.rs/2bylYpf
($1 = 9.3380 Swedish crowns)
Reporting by Simon Johnson and Johan Ahlander; editing by Johannes Hellstrom and Niklas Pollard