MNI BRIEF: Swedish Monetary Policy Restrictive Through H1- IMF
Swedish monetary policy will need to stay restrictive in the first half of 2024, the IMF says
Sweden faces exceptionally high uncertainty over its inflation outlook and monetary policy will need to stay restrictive throughout the first half of 2024, the International Monetary Fund said in preliminary remarks ahead of its comprehensive Article IV report on the economy, published Monday.
The Riksbank board stated following its first meeting of 2024 that it was not ruling out a cut in the first half. The IMF, however, urged caution over easing, stating that the country is facing two-sided inflation risks and recommending that the central bank sticks to a data driven approach.
The IMF staff assumed that, with the current restrictive policy staying in place through the first half of 2024, inflation would hit the 2 percent target in the first half of 2025 and it noted that if global supply-side disruptions have a heavier impact policy would need to be contractionary for longer. (See MNI INTERVIEW: Riksbank Eyes Krona In Dovish Shift - Governor)