Sweden's economic development justifies tighter monetary policy, central bank's Bunge says
Sweden's economy is recovering on a broad front and inflation is expected to rise above target next year, justifying a tighter monetary policy, Swedish central bank Deputy Governor Aino Bunge said on Thursday.
"This development justifies a tighter monetary policy, and it is likely that interest rates will be raised further over the coming year," the Riksbank's Bunge said in the summary of a speech. She added, however, that any future increases must take into account households' sensitivity to interest rates.
The Riksbank this month raised its policy rate for the first time since 2023, pointing to inflation risks from the Middle East conflict and a stronger economy, and meeting minutes showed another hike is likely in the coming months.
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