In a morning mail SEB note Sweden's growth...>

SWEDEN: In a morning mail SEB note Sweden's growth picture has improved and

after a strong second quarter have revised Sweden's GDP growth forecast three

tenths higher in 2018 to 2.9 per cent and two tenths higher in 2019 to 2.4 per

cent. SEB add, job growth is slowing after a climbing quickly in 2017, but

unemployment will still fall below 6 per cent late this year. Despite high

resource utilisation, price and wage pressures remain weak. When the effects of

the energy price upturn vanish from the statistics, CPIF (the consumer price

index minus interest rate changes) will again fall below the Riksbank's 2 per

cent inflation target, approaching 2 per cent only late in our forecast period.

Because of low underlying inflation, the Riksbank will postpone its first key

interest rate hike until April 2019, but due to growing divisions on its

Executive Board, a rate hike in late 2018 - in keeping with the Riksbank's

current rate path - cannot be ruled out. By the end of 2020, the Swedish repo

rate will be 0.75 per cent. Ten-year government bond yields will move closer to

German yields in the short term, driven by such factors as the Riksbank's early

reinvestments in government bonds, but will then gradually climb to 1.90%.