Riksbank Won’t Cut Rates as Swedish Economy Rebounds, NIER SaysJohan Carlstrom
Sweden’s central bank won’t cut its main lending rate further as growth in the largest Nordic economy rebounds this year and next year, the Swedish National Institute of Economic Research said.
The Riksbank will keep its repo rate at 1 percent this year, NIER forecast today in a statement on its website. The $500 billion economy will grow 1.5 percent this year and 2.5 percent in 2014 after growing 0.7 percent in 2012, it predicted, raising estimates from March.
The Swedish central bank in April said it planned no more rate cuts as it delayed the timing of a rate increase as weak demand and a strong krona put a lid on prices. The Riksbank has cut its key interest rate four times since December 2011 to boost growth which has suffered from weak export demand. Sales abroad make up about half of Swedish output.
Consumer prices will rise 0.1 percent this year and 0.8 percent in 2014, below the Riksbank’s 2 percent inflation target, NIER predicted. Unemployment will average 8.3 percent this year and in 2014, it said.