Published 21 December 2022 at 14.34
Economics. High inflation and rising interest rates contribute to the Swedish economy entering a recession in 2023, according to the Economic Institute (KI). And the recession will last until 2025, the assessors believe.
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KI believes that the policy rate will only reach 2.75 percent in February 2023 before inflation falls rapidly and is back to normal levels as early as the same autumn.
– The outlook is gloomy for GDP, but So far this year, GDP has held up quite well, says KI's unit manager Erik Spector during a press conference.
Speculation in the housing bubble lifted Sweden. But now it's crashing.
– Part of what has driven GDP up since the pandemic is that housing investment has been very strong. Those conditions have changed radically. House prices have fallen and we expect them to continue to fall in the spring, says Spector.
Swedish households are more sensitive to interest rates than households in other countries as a result of high loan-to-value ratios and short fixed interest periods, according to KI.
However, households do not agree with the positive aspects of KI's forecast. Among households, the situation is record pessimistic.
Inflation
- Swedish CPI inflation of 10.9 percent in October
- US interest rates rise sharply
- Inflation smock: 10.8 percent
- Food prices continue to rise sharply
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