(Bloomberg) -- Sweden’s Riksbank is more likely than not to take its benchmark rate below 3% before the end of the year, Governor Erik Thedeen reiterated, as the country’s economy is treading water and the central bank is increasingly confident that inflation will remain near its target.
Last month, the Swedish central bank lowered its key rate to 3.5% from 3.75% and said it expects another two or three similarly-sized cuts before the end of this year. Data released since then hasn’t changed Thedeen’s view that the latter option is more probable.
“If the forecasts hold, we can feel more confident and then there will be stronger arguments for doing somewhat more than two cuts,” he told reporters after a speech in Stockholm. “I have said that I see three additional cuts as most likely, and that is my personal view.”
Recent data from Sweden has shown a decrease in the number of bankruptcies, rising home prices and a milder second-quarter contraction than expected. Even so, Thedeen said he hasn’t seen any signals that would motivate a different view than he expressed at the bank’s Aug. 19 meeting.
“The data has confirmed the view we had so I see no reason to change that,” he said. “GDP and consumption data appears to show a plateaued and a bit stagnant development, while more forward-looking indicators have turned more distinctly positive.”
--With assistance from Christopher Jungstedt.
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