Sweden’s central bank left its key interest rate unchanged on Thursday and suggested that the rate is set to remain at the current level for some time to come.
The executive board of the Riksbank decided to hold the policy rate at 1.75 percent. The decision matched economists’ expectations.
The bank has reduced the rate by 200 basis points since it started policy easing in May 2024.
“If the outlook for inflation and economic activity holds, the policy rate is expected to remain at this level for some time to come,” the bank said.
Policymakers observed that the prospects for the Swedish economy look brighter. The recovery is under way though it is taking time before economic activity returns to normal.
The bank upgraded its economic growth outlook for 2025 to 1.5 percent from 0.9 percent, and the projection for 2026 to 2.9 percent from 2.7 percent. Growth in 2027 was seen at 2.5 percent, up from 2.4 percent estimated in September.
The board expects inflation to stabilize close to the target in the medium-term. Inflation forecast was downgraded to 0.7 percent from 0.8 percent this year and that for next year to 0.6 percent from 0.9 percent. The projection for 2027 was retained at 2.1 percent.
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