Swedbank predicts economic contraction for Sweden in 2023 and 2024
2023.11.15 05:33
Swedbank, a major financial institution in Sweden, has forecasted an economic downturn for the country, projecting a contraction in gross domestic product (GDP) for both this year and the next. The bank’s economic outlook, released today, anticipates a GDP decrease of 0.5% for 2023 and an additional 0.4% for 2024.
The expected contraction is largely due to a combination of persistently high inflation and increased interest rates, which are expected to dampen household spending significantly. Furthermore, a halt in housing construction activities is adding to the economic headwinds. Alongside these factors, the labor market is showing signs of deterioration, further complicating the nation’s economic landscape.
Despite a forecasted decrease in inflation rates over the course of the year, Swedbank has indicated that high inflation levels are likely to persist until they align with the Riksbank’s target of 2% by next summer. In light of these challenges, the Riksbank is planning to implement a tighter monetary policy this winter. This policy adjustment includes an increase in the policy rate by 25 basis points in November.
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