Anna Seim in Umeå: Protracted conflict in the Middle East risks disrupting global value chains
Presentation “Every day that the conflict in the Middle East continues, the risk of major disruptions to production and value chains increases, which could push up inflation. In a situation with high inflation and falling demand, we face difficult trade-offs. But in Sweden, we have low inflation at the outset and are well placed to manage developments.” These were the words of Deputy Governor Anna Seim when she visited Umeå on Thursday and spoke about the economic situation and monetary policy at Nordea and at a conference organised by the Swedish Association of Budget and Debt Counsellors.
Date: 23/04/2026 08:00
Speaker: Deputy Governor Anna Seim
Place: Umeå
Anna Seim, deputy governor.
The conflict in the Middle East impacts a global economy that has proved resilient but been subject to severe challenges for some time. Rising energy prices are driving up production costs further and can give rise to negative supply effects and disruptions in complicated production networks.
“At our most recent monetary policy meeting, I expressed more concern that inflation would be too high than that it would be too low, and noted that this justified intense vigilance. At the same time, it should be remembered that inflationary pressures in Sweden are currently subdued. There is still considerable uncertainty and developments are difficult to predict.”
“Last week we attended the IMF/World Bank Spring Meetings in Washington and had the opportunity to discuss developments with representatives of a large number of countries. It is clear that different economies are affected to varying degrees by rising oil and energy prices and that we also have different starting points. In Asia, concerns about the potential impact of the situation on production and global value chains are especially pronounced. Other countries are warning of a slowdown in economic activity."
A key factor in this situation is to conduct a ‘robust’ monetary policy that gives rise to acceptable outcomes even if the economy does not develop as we expect, said Ms Seim.
“As I argued in March, a policy rate of 1.75 per cent is a slightly expansionary, close-to-neutral interest rate level that provides us with a good starting point so that, once more reliable signals are available, we can adjust monetary policy if this is deemed warranted.”