"We have included the reduction in August, but actually think it should come earlier since it takes time for an interest rate reduction to stimulate the economy," says SBAB's chief economist Robert Boije according to a press release.
However, he expects the Swedish Central Bank to want to ensure that the high inflation at the beginning of the year is only temporary and that the trade war that erupted after President Donald Trump's tariff shock in April does not create new strong inflation impulses.
"With our new forecast for the repo rate, the variable average interest rate will fall towards 3 percent in August. Mortgage interest rates are expected to be in the range of 3-4 percent in the short term, depending on the binding period," says Boije.
The announcement comes in an updated forecast, where SBAB also lowers its growth forecast for Sweden this year to 1.4 percent. Previously, SBAB's growth forecast was 1.8 percent this year.
SBAB also lowers its growth forecast for 2026 to 2.7 percent, from previously 3.0 percent.
Regarding housing prices in Sweden, SBAB halves its forecast for price increases to 3 percent this year, from previously 6 percent.
