The prolonged low-growth period may be over this summer, writes Swedbank in its latest economic forecast for the Swedish economy.
Hopes are pinned on household consumption, which is expected to drive development.
"The household sector is interest-rate sensitive and it is only this year that the Swedish Central Bank's interest rate cuts are more clearly noticeable in households' wallets. Together with real wage increases and tax cuts, this contributes to household consumption growing significantly faster than normal from the summer," says Swedbank's chief economist Mattias Persson in a press release.
GDP growth
The bank expects Sweden's GDP to grow by 2 percent in 2025 and 3 percent in 2026, and for housing prices to rise by 5 and 7 percent, respectively, over the two years. Unemployment is expected to remain around 8.4 percent in 2025 before starting to decline.
SEB's economists see a similar development.
"For Sweden's part, we are sticking to the notion that there will be a turnaround during the year and that we will get a growth upswing after a couple of years of weak development. However, this requires that at least some of the coming improvements in household economies are used for consumption, which is likely but not certain," says SEB's forecast chief Daniel Bergvall in a written comment.
Diverging opinions
Swedbank believes that the Swedish Central Bank will make its second and final rate cut of the year to 2.0 percent in March. SEB, on the other hand, estimates that the final rate cut will come in May, from the current level of 2.5 percent.
Norwegian DNB, meanwhile, expects a continued bleak development for the Swedish krona. In a year's time, one euro is expected to cost 11.70 kronor, while the US dollar is expected to be around 11.05 kronor.
"The exposed krona is another reason why we believe that the Swedish Central Bank will avoid further rate cuts," writes DNB, which expects only one rate cut in 2025.
