Sweden Interest Rate

The Swedish Riksbank kept its policy rate at 2.25% in May 2025, in line with expectations, citing increased global uncertainty, especially following a shift in US trade policy, which has led to market volatility and weaker growth prospects in both the US and Europe. This global backdrop has contributed to a slightly weaker Swedish economic outlook compared to March, with falling household confidence and early signs of rising corporate pessimism. Inflation in April was somewhat elevated at 2.3% (CPIF) and 3.1% (CPIF excluding energy), but the Riksbank still views this as temporary. While inflation risks remain, particularly from supply chain disruptions or protectionist policies, the Executive Board judges it more likely that inflation will fall below the March forecast. Given these uncertainties, the Board considers the current monetary stance to be well-balanced and sees merit in awaiting further data before making changes, though a future rate cut is possible.