STOCKHOLM, Oct. 25 (Xinhua) — High inflation and interest rate hikes will affect many Swedish households and slow the country’s economic growth next year, a leading bank said in a report published here on Tuesday.
Sweden’s growth in gross domestic product (GDP) is expected to be minus 1.1 percent next year, said Mattias Persson, Swedbank’s chief economist and global head of macro analysis, in an interview with Sveriges Television (SVT) on Tuesday.
The Swedish central bank’s key interest rate is expected to increase from the current 1.75 percent to 3 percent by February, according to Swedbank’s latest economic outlook.
It expects inflation and unemployment to reach 7.4 percent and 7.6 percent respectively in 2023.
Consequently, Swedish households are expected to put a higher proportion of their disposable income on mortgages since the 1990s, a situation that Persson said would have a wider effect on the Swedish economy.
– The labor market still shows resilience, but the situation is expected to worsen when employment-intensive industries such as trade and construction are affected, Persson told SVT.
Source: sn.dk