Account of Monetary Policy 2022 – Higher policy rate to tackle high inflation

News, Riksbank studies In 2022, inflation was at its highest level since the inflation target was introduced, and the deviation from the inflation target was exceptionally high. At the end of 2021, with the exception of energy prices, inflation was still below 2 per cent. However, during the year, price increases on energy and other inputs spread to many other categories of goods and services and inflation rose rapidly.

The Swedish price increases, like those abroad, were to a large degree caused by various imbalances and disturbances resulting from the pandemic and Russia's invasion of Ukraine. The large and broad-based rise in inflation was also due to good demand, which enabled companies to pass on their rising costs to consumers. In this situation, it is important to maintain confidence in the inflation target by conducting a monetary policy that brings inflation back to the target and prevents it from becoming entrenched at a high level. The Executive Board raised the policy rate by a total of 2.5 percentage points at the same time as the Riksbank's asset holdings decreased.

Monetary policy contributed to long-term inflation expectations being stable and close to the inflation target, despite the fact that inflation was well above the target. Economic activity was good during the year and labour market developments were strong.

The Riksbank has learnt several lessons from developments in 2022, including the need to closely follow changes in companies' pricing behaviour and to analyse the uncertainty surrounding the forecasts to a greater extent.

Read more about the monetary policy conducted last year in the report Account of Monetary Policy. It also contains an article on the Riksbank's asset purchases in 2015-2022 and the effects that they are expected to have on the Riksbank's financial results.

Evaluation of the Riksbank’s forecasts

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.

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Updated 30/03/2023