Jansson at the Riksdag Committee on Finance: Monetary policy supporting recovery and inflation
The Swedish economy has withstood the second wave of infection relatively well, supported by extensive economic policy measures. This comment was made by Governor Stefan Ingves in his introduction, when he and Deputy Governor Per Jansson took part in the first monetary policy hearing of the year at the Riksdag Committee on Finance.
Date: 16/03/2021 10:00
Speaker: Deputy Governor Per Jansson
Place: Committee on Finance, Sveriges Riksdag
Mr Jansson focused on inflation in his introduction. It is expected to show a clear increase going forward, but this is primarily due to temporary effects, such as rising energy prices. Underlying inflation will remain moderate. The Riksbank’s forecast is that inflation will fall back, but that it will then rise gradually after the summer as the economy recovers.
Mr Jansson also noted that the debate on inflation has changed recently. Now the risks of high inflation are being discussed, particularly in the United States. “I personally believe that the risk of higher inflation is around as great as the risk of lower inflation,” said Mr Jansson. “But after a long period of low inflation, it would not be a problem if inflation in Sweden overshoots the target for a period of time. I would not see any need to make monetary policy less expansionary because of this. Inflation that is too low, on the other hand, might need to be countered with more expansionary monetary policy, at least if problems arise regarding confidence in the inflation target. In that case there may also be a need for a lower repo rate,” said Mr Jansson.