Sweden's central bank cuts interest rates by 0.25% to boost economic growth

Sweden's central bank cuts interest rates by 0.25% to boost economic growth, says uncertainty remains, especially over economic policies in the United States and Europe, geopolitics

On January 29, 2025, Reuters reported that the Swedish central bank lowered its policy interest rate to 2.25% from 2.50%, as expected , marking the fifth consecutive rate cut in an effort to stimulate slowing economic growth, although the central bank remains prepared to take further action if price trends and economic activity change.

The Swedish central bank stated, “Given the limited risk of excessive inflation, at a time when economic activity is weak… it is appropriate to cut the policy interest rate at this time.”

At its December 2567 meeting, the Swedish central bank stated that it expected to cut interest rates only once this cycle, possibly in the first half of the year. This marks nearly the same rate cuts as the rate hikes implemented during the global inflation surge following the pandemic and Russia's invasion of Ukraine.

After reaching a peak of 4%, the central bank has eased policy six times since spring 2567, with the 565 result being under control.

However, the Swedish central bank stated that “there is particular uncertainty regarding developments abroad, such as economic policy in the US and Europe, and geopolitical tensions. There are also risks associated with the Swedish economic recovery and the krona exchange rate.”

Reference: reuters.com

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