Jansson stresses vigilance on inflation target

Deputy Governor Per Jansson commended Swedish social partners for their responsible wage formation during the high inflation period of 2022–2023.

He noted that this responsible approach significantly contributed to a faster and more substantial reduction in inflation within Sweden, enabling the Riksbank to implement policy rate cuts more swiftly and extensively compared to many other nations.

Jansson stated, "The social partners deserve credit for the responsibility they demonstrated in wage formation during the period of high inflation in 2022–2023.

Compared with many other countries, this helped bring inflation down more significantly in Sweden and enabled the policy rate to be cut more quickly and to a greater extent here than in many other parts of the world.

" This collective effort created a more favorable environment for monetary policy adjustments.

Jansson highlighted that this year's inflation trajectory is notably influenced by two opposing factors: a reduction in VAT on food, which exerts downward pressure, and rising energy prices, which push inflation upwards.

He articulated that it is generally appropriate for monetary policy to 'look through' such temporary effects.

However, Jansson cautioned that the volatile situation in the Middle East introduces considerable uncertainty, necessitating vigilance against potential spillover effects, particularly those stemming from further increases in energy prices, which could impact broader economic stability and price dynamics.

He contrasted the current situation with 2022, noting today's lower inflationary pressures, weaker demand, and a stronger Swedish krona, which collectively reduce the risk of such spillover effects.