Per Jansson: Low inflation provides a good starting point, but we need to be vigilant

“At the moment, all monetary policy makers are grappling with the question of how far-reaching the effects of the supply disruptions in the wake of the war in the Middle East will be,” said Jansson. “I still have not given up hope that the impact might be relatively limited, especially here in Sweden.” 

Compared with the period of high inflation in 2021–2023, Sweden, like many other countries, now has the advantage that demand in the economy is not nearly as strong as it was back then. At the same time, policy rates are now higher in most countries than they were at the start of the high-inflation years, Jansson noted. Furthermore, in Sweden, inflation is clearly weaker now than it was then, and few indicators suggest that a significant upturn is imminent. 

“But I certainly don’t want to sound the all-clear.” The risk of a more serious inflation scenario has increased over the spring. In an adverse scenario, the current, more favourable inflationary conditions could quickly become a thing of the past, and monetary policy may need to be tightened. But the jury is still out on that. “That is why, at our last monetary policy meeting, I considered it appropriate to adopt a wait-and-see approach and to leave the policy rate unchanged at 1.75 per cent.”