A cautious recovery is now beginning to appear within the Swedish economy, according to KI. In 2026, bnp growth (calendar-adjusted) is expected to amount to 2.4 percent compared to 1.1 percent this year.
Growth will be good and it is mainly domestic demand that contributes, says Ylva Hedén Westerdahl.
KI assesses that households will now start consuming again as real wages rise. This is when reduced taxes contribute to the real disposable income growing relatively quickly, according to KI.
Since a year ago, household consumption has grown, albeit at a modest pace. It is mainly cyclical durable goods that have contributed to this increase, she says.
Reduced electricity tax contributes
Inflation is expected to fall back next year as a result of reduced food vat and reduced electricity tax.
Next year, inflation is expected to average 0.9 percent. If you exclude the reduced food vat and the reduced electricity tax, inflation would instead be 1.6 percent, she says.
KI warns, however, of a certain delay when it comes to the recovery in the labor market. Unemployment is expected to decrease marginally to 8.4 percent next year from 8.7 this year, and then decrease significantly in 2027 (7.6 percent).
It will not be until 2028 before unemployment is down to its equilibrium level. That the labor market is lagging behind is, however, a relatively common business cycle pattern, Ylva Hedén Westerdahl.
No further reductions
After yesterday's interest rate cut, the Swedish Central Bank announced that it was the final cut when it comes to the repo rate. This is also KI's assessment. Instead, one can now see that the Swedish Central Bank will gradually raise the repo rate to 2.75 percent in 2027, that is to say 1.0 percentage point higher than the current level.
Corrected version: In an earlier version, incorrect information about the interest rate cut was provided.
