Sweden's Central Bank Keeps Interest Rates Steady for the Fourth Time

Swedish Central Bank's Interest Rate Decision

Riksbank announced that it will continue to maintain the policy interest rate set in December. In the statement, it emphasized that, as expected by Bloomberg economists, interest rates are expected to remain unchanged.

Economic Outlook and Growth Forecasts

Policy makers indicated that borrowing costs are not expected to change after 2023. Riksbank officials stated, "The current policy interest rate is expected to contribute to strengthening economic activity in the long term and stabilizing inflation around the target level."

Swedish Economy and Inflation

This decision by the Swedish Central Bank comes at a time when the Swedish economy is ready for a strong recovery after nearly three years of stagnation. According to Bloomberg data, this year growth is expected to be 2.4%, making it one of the fastest-growing economies in Europe. In addition, inflation is projected to decline from high levels after the pandemic to the 2% target and possibly below it.

Future Expectations

According to Riksbank's December forecasts, as the economic recovery becomes more solid, inflation is expected to rise again. Therefore, they anticipate starting to increase borrowing costs by 2027.

Geopolitical Uncertainties

However, policymakers especially highlighted uncertainties arising from the U.S. "In early 2026, geopolitical developments, particularly due to the U.S. administration's foreign policy stance, could become quite striking," alerting that there may be rapid changes.