The Swedish Central Bank is lowering the interest rate by 0.25 percentage points to 2.0 percent. It is the seventh reduction since last May and the second so far this year.
The decision to lower is based, among other things, on the fact that inflation has followed the Swedish Central Bank's forecast and is expected to be in line with the target of 2 percent ahead.
The recovery in the Swedish economy is also slower than the Swedish Central Bank has counted on. The growth in the Swedish economy is weak, households are depressed and unemployment is still high.
Gets wetter
Riksbank Governor Erik Thedéen describes it as trade conflicts and a turbulent world having created a "wet blanket" over the Swedish economy.
If you forget the human suffering, which after all must be the focus if you are human, and just look at the economic, the wet blanket gets even wetter because we get such enormous uncertainty, he says at a press conference.
He highlights, among other things, rising oil prices as a factor that can dampen the economy.
The whole situation means that there is every reason to be vigilant, he says.
The Swedish economy has not taken off due to the uncertainty in the world, as the Swedish Central Bank has counted on. Therefore, the central bank is lowering its forecast for growth this year from 1.9 percent to 1.2 percent.
The economy has lost momentum quite significantly in the first quarter, says Thedéen.
The fact that inflation has come down and the economy is still poor means that the Swedish Central Bank is opening up for further interest rate cuts this year – there is "a certain probability" of it.
It doesn't mean that we promise anything, but it's our best assessment, which is based on us seeing a more limited inflation pressure, says Erik Thedéen and continues:
If we now get good growth that takes off, then the arguments for lowering the interest rate decrease.
Not extremely bad
But not everything is pitch black. According to Thedéen, there are "pretty good conditions for a stronger economy".
Inflation is near the target and we have wages that rise more than inflation, so we get a real wage increase.
The trade conflict with the USA has not become "as extremely bad as one thought after April 2", says Thedéen.
It doesn't seem like we're getting these draconian tariffs from the USA, he says.
