Account of Monetary Policy 2020 – Most important task: to alleviate the effects of the coronavirus crisis on the economy

News, Riksbank studies 2020 was an unusual year in many ways. The coronavirus pandemic completely changed the economic prospects. GDP plummeted and the conditions for attaining the inflation target during the year were radically altered. Governments and central banks around the world implemented large-scale fiscal and monetary policy measures to alleviate the consequences for the economy and prevent problems in the affected areas from spreading to other parts of the economy and to the financial sector. The year was therefore also unusual for the Riksbank. Normally, the Executive Board takes monetary policy decisions five times a year. During 2020, decisions were taken on more than 20 occasions.

The Riksbank focused on preventing the coronavirus crisis from also resulting in a financial crisis and an even deeper downturn that could, in turn, have led to more persistent low inflation. Thus, the measures had the dual purpose of on the one hand maintaining financial stability and supporting the real economy, and on the other hand contributing to attaining the inflation target. However, they could not prevent the heavy falls in both economic activity and inflation, as the crisis had an unusual origin and a very rapid sequence of events. Inflation therefore deviated from the Riksbank’s target quite substantially over the course of the year. All in all, however, production and employment were affected less in 2020 than had been feared at the beginning of the crisis. One explanation for this is the comprehensive economic policy support implemented both in Sweden and abroad.

Read more about the monetary policy conducted last year in the report Account of Monetary Policy. The report also contains reasoning on a number of issues gathered from the monetary policy debate over the year, including the level of the repo rate, the purchases of commercial paper and the distributional effects of monetary policy.

Unusually difficult to make forecasts

Making forecasts of economic developments is never easy. But when the pandemic affected the global economy, future economic developments became extremely uncertain and the forecasting work harder than ever. A year on, it can be noted that although GDP fell significantly in 2020, growth was unexpectedly high and unemployment unexpectedly low at the end of the year, in relation to the forecasts made by the Riksbank just before the outbreak of the pandemic. The Riksbank Study Evaluation of the Riksbank's forecasts is a complement to the Account of Monetary Policy. It describes economic developments over the year in relation to the Riksbank's forecasts, and contains an evaluation of the Riksbank's forecasts in relation to those of other analysts.


Every year, the Riksdag Committee on Finance examines and assesses the monetary policy conducted by the Riksbank during the preceding years. The Account of monetary policy provides a basis for this assessment.

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Updated 24/03/2021