The Swedish central bank cuts interest rates – NRK Norway – Overview of news from different parts of the country

There was great tension surrounding the interest rate decision from the Swedish central bank, but a large majority of the economists both NRK and Swedish media spoke to agreed that cuts were in the offing on Wednesday.

It has been over eight years since the Riksbank last lowered interest rates. And now the central bank announces that there may be two more cuts this year.

– If the inflation outlook holds, the key interest rate may be cut a further two times in the second half of the year, according to a press release.

The decision causes jubilation in Sweden.

– There it sat – in the middle of the interest rate cross! write senior economist Robert Bergqvist in SEB on Twitter. He adds that the interest rate cut was both long-awaited and missed.

How is it possible that the Swedes can lower interest rates before Norway? In short, it is because things are getting worse in the Swedish economy:

• The underlying price increase in Sweden, which is what the central banks look at, was 2.2 per cent in March. In Norway, it came in at 4.5 per cent. The central banks want the price increase to be around 2 per cent.
• More people are unemployed in Sweden than in Norway. The unemployment rate in Sweden is more than 8.3 per cent, while in Norway it is around 3.9 per cent, according to figures from the Statistics Agency.
• Although there is fairly flat development in the Norwegian economy (gross domestic product), there is even lower activity in the Swedish economy
• Last year, the Swedish trade unions agreed to a wage settlement that gave them weakened purchasing power. The Swedish front-line profession agreed to a two-year agreement, agreeing to a salary increase of 4.1 percent last year and 3.3 percent this year. By comparison, the frontline subject in Norway this year is 5.2 per cent.