Sweden’s economic recovery is gaining traction, but inflation risks remain unclear, central bank governor Erik Thedeen said on Thursday, as policymakers weigh the outlook for prices against signs of stabilizing growth.
The Riksbank’s assessment follows last week’s GDP data, which showed the economy expanding, reinforcing the view that activity is firming after a period of volatility. In August, Thedeen noted that the recovery was becoming more stable, though he cautioned that inflation pressures had yet to crystallize.
The governor highlighted spare capacity in the labor market as a potential buffer, allowing growth to accelerate without immediately stoking inflation. "We have not seen clear signs of a sustained, widespread rise in inflation," Thedeen said, while stressing the need for continued vigilance.
The Riksbank plans to review recent economic statistics and other incoming information to assess their implications for inflation projections, economic forecasts and monetary policy settings. The central bank has not signaled any imminent shift in its policy stance, leaving the door open for further adjustments based on evolving data.
The remarks underscore the delicate balance facing the Riksbank as it navigates an economy recovering from a prolonged downturn while monitoring price dynamics that remain difficult to predict.
