* Q4 GDP +7.3 percent yr/yr, fastest pace on record
* Q4 GDP +1.2 percent q/q vs median forecast +1.0 percent
* Boosts case for more rate hikes
(Adds analysts, central bank governor comments)
By Anna Ringstrom
STOCKHOLM, March 1 (Reuters) - Sweden's economy grew at a record pace in the fourth quarter, data showed on Tuesday, further widening the gap with most European countries and bolstering the case for quicker interest rate hikes this year.
Gross domestic product grew 1.2 percent from the third quarter, and 7.3 percent from a year earlier -- the fastest on record and backed by strong exports and rising consumption. It beat economists' median forecasts in a Reuters poll for 1.0 percent and 7.0 percent respectively.
Year-on-year growth was the fastest in Europe.
The economy expanded 5.5 percent in 2010, the biggest rise since at least 1970, as it put well behind it a 5.3 percent contraction in 2009.
The Swedish crown strengthened marginally after the GDP figures to around 8.717 to the euro at 0941 GMT from around 8.722 shortly before the data.
Sweden, which relies heavily on exports, bounced back relatively quickly from its worst recession since World War Two, helped by firming global demand for capital goods, low interest rates, strong public finances and tax cuts.
Interest rates have now come off record lows hit during 2009 and the crown has recovered its pre-crisis strength and more.
"Exports don't seem to have had a negative impact from the firmer crown," Nordea economist Bengt Rostrom said, noting that the annual growth rate accelerated more than the central bank had seen. "This probably strengthens the Riksbank's plans for rate hikes."
The statistics office said household consumption increased 4.3 percent from the third quarter while exports increased 13 percent. It said changes in inventories amounted to a positive GDP change of 1.5 percentage points.
Swedbank economist Per Sellden said Sweden has had a remarkable recovery.
"We were very much affected by the crisis, more than others. Nevertheless, the recovery went very fast in Sweden and it may have something to do with the weaker krona -- the momentum is still there in Swedish production. We have been fairly lucky with the mix of products that we have in Sweden," he said.
Growth rates are expected to slow from exceptionally high levels in coming quarters as export growth slows and inventories normalise.
Third-quarter GDP figures were not revised at a quarterly rise of 2.1 percent and an annual rise of 6.9 percent.
CREDIT GROWTH
The strength in the Swedish economy has however been somewhat clouded by worries over rapid household lending growth and the prospect of a housing market bubble.
The Riksbank, which has raised rates at five straight meetings to stem inflationary pressure and rapid credit growth, is expected to continue to tighten policy through this year.
Central bank governor Stefan Ingves told a seminar on rapid household credit growth on Tuesday it remained to be seen whether measures to rein in credit growth would suffice but that the housing market appeared to have entered a calmer phase.
Finance Minister Anders Borg said at the seminar that banks could expect capital requirements to be raised by roughly a percentage point per year over the coming years.
Financial Markets Minister Peter Norman pointed to the case of Switzerland which has introduced tougher requirements than those planned under the new global Basel III capital requirement rules, saying it was an "interesting example".
In Switzerland, data showed on Tuesday that the Swiss economy grew 0.9 percent in the fourth quarter. (Additional reporting by Niklas Pollard, Simon Johnson, Mia Shanley, editing by Stephen Nisbet)