Thedéen: Well-anchored inflation target despite high inflation

News During 2022, monetary policy contributed to ensuring that long-term inflation expectations were stable and close to the inflation target, even though inflation was well above the target, said Governor Erik Thedéen today, when the Executive Board attended a hearing in the Riksdag Committee on Finance about last year’s monetary policy.

“Inflation reached record levels in 2022. The focus for the Riksbank in this situation has been to retain confidence in the inflation target by conducting a monetary policy that brings inflation back to 2 per cent and prevents it from becoming entrenched at a high level. This has contributed to long-term inflation expectations being stable and close to the target. Economic activity was also good during the year and the labour market was strong.”

However, Mr Thedéen also highlighted the difficulties in making accurate forecasts for inflation last year. Inflation was considerably higher than was forecast by both the Riksbank and other market participants.

“Inflation in Sweden and abroad was clearly underestimated. At the time of the decision in February 2022, inflation had risen, but this primarily due to energy prices. Apart from these, inflation was still below the target and there were few signs of contagion effects. There are many lessons to be learned, including how quickly cost increases could be passed on to consumer prices in an environment with strong demand. There may also be reason in future, for us to analyse to a greater extent scenarios with large differences in the development of inflation in the data and reports on which monetary policy decisions are based. Even if the scenarios there and then don’t feel very likely, such analyses can improve our preparedness.”

The Riksbank's Account of Monetary Policy in 2022 was commented on by Professor John Hassler, Professor Per Krusell and Associate Professor Anna Seim, who were commissioned by the Riksdag Committee on Finance to evaluate the monetary policy conducted in 2022. The Executive Board of the Riksbank and the opponents were then questioned by the members of the Committee.


Every year, the Riksdag Committee on Finance examines and assesses the monetary policy conducted by the Riksbank during the immediately preceding year. The Riksbank compiles and publishes material for this assessment in a document entitled Account of monetary policy. This year the Committee has for the first time commissioned the Center for Monetary Policy and Financial Stability (CeMoF) at Stockholm University to evaluate monetary policy in 2022. The report also forms a basis for the Riksdag Committee on Finance’s annual evaluation of the Riksbank’s fulfilment of its monetary policy objectives.

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Updated 30/05/2023