Swedish GDP fell 1.3% in August against the previous month, a preliminary, seasonally-adjusted, estimate by the Statistics Office showed on Thursday.
Against a year earlier, activity was 3.6% higher on a calendar-adjusted basis.
Sweden's economy has done well so far this year, but inflation - currently at 9.0% - and interest rate hikes are beginning to impact households and businesses.
Separate data showed private sector production down 1.3% in the month and household consumption unchanged. Industrial production was down 6.4% in August compared to the previous month.
The central bank expects inflation to peak at around 11% at the turn of the year and rates are set to rise to 2.5%, even though the economy is slowing. The central bank is forecasting a 0.7% contraction in GDP in 2023.
But the outlook is uncertain. Inflation has consistently outstripped the Riksbank's expectations and further upside surprises would probably prompt the central bank to hike more aggressively than currently expected.
Markets already see the policy rate topping out at over 3% next year.
The central bank hiked the benchmark rate a full percentage point last month to 1.75% and is widely seen tightening by three-quarters of a percentage point in November.
(Reporting by Simon Johnson, editing by Stine Jacobsen)