Sweden Outlook Is Clouded Amid Weakness in Europe, IMF Says

Sweden’s underlying growth has slowed “sharply” amid a clouded outlook for the country’s European trading partners, the International Monetary Fund said.

Sweden’s economy may grow 1 percent this year and by 2.3 percent next year, the IMF said in an Article IV report published today and dated June 4.

“On the monetary side, policy should continue to be set according to the baseline scenario, as it can be adjusted rapidly if tail risks are realized,” the Washington-based group said. “Macroprudential instruments should be deployed further if the housing market reflates once again.”

Swedish policy makers will announce their next rate decision on July 4. The bank kept rates unchanged in April after cutting them twice since December after the economy contracted in the fourth quarter.

To contact the reporter on this story: Stephen Treloar in Oslo at jcarlstrom@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net