What is the policy rate forecast?

The policy rate forecast shows what the Executive Board considers to be a well-balanced monetary policy

Monetary policy decisions are normally taken eight times a year. In connection with four of these, a Monetary Policy Report is published that includes a forecast for the policy rate. It is an assessment of which development of the policy rate (which interest rate path) is needed for monetary policy to be well balanced, i.e. a monetary policy that keeps inflation low and stable, maintains confidence in the inflation target and at the same time provides a favourable economic development. The forecast for the policy rate is based on the conditions and economic outlook prevailing at the time of the decision.

The policy rate forecast is published in connection with the publication of the monetary policy decision, when a Monetary Policy Report is published. In connection with the other four monetary policy decisions, a monetary policy update is published, but no new forecast. 

The figure below shows the latest published interest rate path from the September 2024 Monetary Policy Report.

What is the forecast for the policy rate?

Publication dates for monetary policy decisions in 2024

• 2024-12-19 Monetary Policy Report with forecast for the policy rate
• 2024-11-07 Monetary Policy Update
• 2024-09-25 Monetary Policy Report with forecast for the policy rate
• 2024-08-20 Monetary Policy Update
• 2024-06-27 Monetary Policy Report with forecast for the policy rate
• 2024-05-08 Monetary Policy Update
• 2024-03-27 Monetary Policy Report with forecast for the policy rate
• 2024-02-01 Monetary Policy Update

Current policy rate

The policy rate forecast is an assessment – not a promise

It is important to remember that the policy rate forecast is an assessment of the future direction of monetary policy and not a promise that the Riksbank will keep the policy rate on the projected rate path regardless of what happens. Although the Riksbank presents its view on an appropriate forecast for the policy rate, it has not committed itself to a particular future monetary policy. Like all other assessments, the policy rate forecast may need to be changed when new information on economic developments in Sweden and abroad is available.

Therefore, there is always some uncertainty about the future development of the policy rate in the same way that there is uncertainty about the future development of the economy. The further ahead the forecast looks, the greater the uncertainty. To illustrate the uncertainty surrounding future monetary policy, the Riksbank often publishes alternative scenarios in its Monetary Policy Report. These are examples of how the interest rate may change if economic developments in the future were to be different from those projected in the main scenario.