Swedish Central Bank Will Cut Rates Again Next Year, NIER Says

Sweden’s central bank will cut its main lending rate again next year to stimulate demand in the slowing, export-reliant economy, the Swedish National Institute of Economic Research said.

The Riksbank will cut its repo rate to 0.75 percent in 2013, as economic growth will slow to 0.9 percent this year and 0.8 percent in 2013, NIER said in a statement today. Headline inflation will slow to 0.4 percent next year from 0.9 percent in 2012, below the central bank’s 2 percent target, it predicted.

Sweden’s central bank yesterday lowered its benchmark rate for a fourth time in the past 12 months as Governor Stefan Ingves said consumer sentiment has weakened and exports are suffering from slumping European demand.

Swedish unemployment will rise to an average 8.3 percent next year from 7.7 percent in 2012, NIER forecast.

To contact the reporter on this story: Johan Carlstrom in Stockholm at jcarlstrom@bloomberg.net.

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

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