Aino Bunge: Good starting point in a changing world
Presentation “2025 was an eventful year, not least because of the geopolitical turbulence and the sudden shift in US foreign and trade policy. Now at the start of 2026, we can conclude that the Swedish economy is nevertheless in a good starting position. Inflation has moved closer to our target and the real economy has started to recover.” These were the words of First Deputy Governor Aino Bunge when she spoke today at the Association of Local Authority Economists' conference for Chief Economists.
Date: 15/01/2026 15:00
Speaker: First Deputy Governor Aino Bunge
Place: The Association of Local Authority Economists, Stockholm
First Deputy Governor, Aino Bunge
“Our assessment is that a policy rate of 1.75 per cent will continue to support economic activity and contribute to attaining an inflation rate close to the target in the medium term. That is why we left the interest rate unchanged at our last policy meeting at the end of December."
Since then, according to the latest data, inflation has been slightly lower than expected. At the same time, it is clear that economic activity is continuing to strengthen.
“Our starting point looks good. But we need to stay forward-looking in our monetary policy. For example, inflation is expected to fall quite significantly this year, partly as a result of the temporary reduction in food VAT. But we should see through such a temporary effect in monetary policy and focus on underlying inflationary pressures to remain on target over time."
Ms Bunge noted that we are already seeing that 2026 will probably be an eventful year and she highlighted a number of issues in her presentation that may affect developments. For instance, she pointed to the still very tense geopolitical situation and how the financing of increased defence spending is handled in different parts of the world, the high share valuations of AI companies and, for municipalities, the demographic challenges resulting from a lower birth rate and an ageing population.
“Our latest forecast is that the policy rate will remain at its current level for some time to come, but nothing is certain in a changing world”