Sweden’s central bank governor, Erik Thedeen, said on Thursday that inflation risks remain uncertain even as the economy shows clearer signs of recovery.
Thedeen noted that economic activity is gaining stronger footing, citing GDP growth data published last week as evidence of an improving outlook. In August, he had already indicated that the recovery was becoming more stable. Despite this progress, he said the central bank has not yet observed clear signs of a sustained, widespread rise in inflation.
The governor highlighted spare capacity in Sweden’s labor market as a factor that could allow growth to accelerate without immediately stoking significant inflationary pressures in the near term. He added that the Riksbank will assess all recent economic data and other information to gauge their implications for inflation, economic forecasts and monetary policy decisions.
The remarks underscore the central bank’s cautious approach as it balances growth prospects against the risk of resurgent inflation.
