Riksbank Repo Rate Seen at 1.4% in 12 Months, Survey Shows

The Swedish central bank’s main lending rate will be at 1.4 percent in the next year, according to a survey of labor market organizations, purchasing managers and money market participants commissioned by the central bank.

Consumer prices are estimated to rise 1.3 percent in the next 12 months, down from a 1.5 percent forecast in the previous survey published in June, the TNS Sifo Prospera said. Inflation will be 1.7 percent the following year, below the bank’s 2 percent target, the survey showed.

The Riksbank has cut its benchmark repo rate twice since December, reaching 1.5 percent, to protect the largest Nordic economy from the fallout of Europe’s debt crisis. The bank announces its next rate decision tomorrow.

The central bank’s main rate is estimated to be at 1.8 percent in two years and rise to 2.5 percent in five years, according to the survey.

The Swedish economy will grow 1.6 percent in the next 12 months and 2 percent the following year, according to the survey published today.

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