Introduction to Sweden’s Economy
Sweden’s Riksbank is expected to keep its policy rate unchanged at 1.75% at its January 29 meeting. However, the market will be closely watching to see whether the easing cycle has paused or effectively come to an end. Inflation has fallen faster than expected, but improving growth momentum and a still-cautious Riksbank executive board suggest a high bar for further rate cuts.
Key Takeaways
Some key points to consider:
- Some economists expect Swedish inflation to fall well below target in 2026.
- Riksbank Governor Erik Thedéen is setting a high bar for another rate cut, strategists say, but other executive board members may be more open to changes.
- Despite global political uncertainty, Sweden’s economy is expected to accelerate in 2026.
