Riksbank's Bunge assesses strong economic starting position
First Deputy Governor Aino Bunge stated that the Swedish economy is in a good starting position at the beginning of 2026, with inflation closer to target and real economy recovery. She noted that the Riksbank's policy rate of 1.75 percent will continue to support economic activity.
Swedish economy in good standing
First Deputy Governor Aino Bunge highlighted that 2025 was an eventful year, marked by geopolitical turbulence and shifts in US foreign and trade policy.
Despite this, the Swedish economy enters 2026 in a good starting position.
Inflation has moved closer to the Riksbank's target, and the real economy has begun to recover.
Bunge stated that the policy rate, currently at 1.75 percent, is assessed to continue supporting economic activity and contribute to achieving an inflation rate close to the target in the medium term.
The Riksbank left the interest rate unchanged at its last policy meeting in December.
Latest data indicates inflation has been slightly lower than expected, while economic activity continues to strengthen.
Navigating a changing global landscape
First Deputy Governor Bunge emphasized the need for a forward-looking monetary policy.
She noted that while inflation is expected to fall significantly this year, partly due to a temporary reduction in food VAT, the Riksbank must focus on underlying inflationary pressures to remain on target over time.
Bunge highlighted that 2026 will likely be an eventful year, citing the tense geopolitical situation and global defence spending.
The Riksbank's latest forecast suggests the policy rate will remain at its current level for some time, but acknowledged the inherent uncertainty in a changing world.