What is the policy rate forecast?

It takes time before monetary policy has a full impact on inflation and the economy. Monetary policy is therefore guided by forecasts for economic developments. The Riksbank publishes the forecast for the policy rate, and other forecasts, four times a year.

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?

The figure below shows the outcomes for the policy rate (solid line) and the Executive Board’s assessment of the policy rate in the coming three quarters (dashed line).

Policy rate (per cent), published on 25 September 2024

240925 Styrräntan ppr september3.svg

Outcomes for the policy rate are daily data and forecasts refer to quarterly values. Read more about the forecast for the policy rate in the Monetary Policy Report. Source: The Riksbank.

Publication dates for monetary policy decisions in 2024

Current policy rate

The current policy rate

2.75%
Applies from 13 November 2024

Graph and table

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.

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Updated 07/11/2024