The Central Bank of Sweden kept the rate at 4%
March, 27 2024
The Central Bank of Sweden (Riksbank) decided at its meeting on Wednesday to keep the key interest rate at 4% per annum. This decision coincided with analysts' expectations.
However, Riksbank said that a possible rate cut could begin in May or June, provided that favorable inflation prospects remain.
Although the growth rate of consumer prices has slowed down and is beginning to stabilize at the target level of 2%, the Central Bank management expressed a desire to receive additional confirmation of this process. Riksbank plans to carefully adjust monetary policy with a gradual rate cut. Representatives of the regulator stressed that information on the state of the economy and inflation will be crucial when deciding on further steps.
According to the new forecasts of the Central Bank, inflation in 2024 should slow down to 3.5% compared with previous estimates at 4.4%. In February of this year, consumer prices increased by 4.5%.
It is predicted that this year the average base rate will be 3.8% per annum (4.1% was previously assumed), next year – 3% (against 4% earlier), and in 2026 – 2.7% (instead of the previous 3.6%).
Sweden's GDP forecast has also been adjusted. It is expected that by the end of 2024 it will grow by 0.3%, which differs from the previous forecast of a decrease of 0.2%. At the same time, the forecast for growth rates in 2025 remained unchanged at 1.9%.
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