Economy

Nordea's economists forecast that the Riksbank will not lower the key interest rate this year or next due to persistent high inflation. Despite hints from Riksbank's Erik Thedéen about potential rate cuts, such actions could weaken the krona and exacerbate inflation issues. The current market sees a 100% probability of a rate cut to 1.75% this year, with a 30% chance of a further reduction to 1.5%.

Swedish households are experiencing fewer payment issues, marking a significant improvement after the crisis years. Recent data from Kronofogden shows a decline in debt claims, following a peak in 2023-2024. The reduction is attributed to stricter lending regulations and improved credit assessment practices. However, experts emphasize the need for responsible lending and borrowing to sustain this positive trend.

Swedbank anticipates two interest rate cuts by the Riksbank this fall, as Swedish economic growth slows. The government's autumn budget includes significant, unfunded measures totaling 75 billion SEK, focusing on tax cuts and increased household transfers. Despite these efforts, growth forecasts for 2023 and 2024 have been lowered. SEB also adjusts its GDP predictions, citing global uncertainty and inflation concerns.

Swedish AP funds have invested billions in companies accused by the UN of violating international law and human rights in Gaza. Notable companies include Rolls Royce and Palantir, both linked to military operations in Israel. Despite guidelines against such investments, AP funds continue to hold significant shares, citing difficulties in verifying information from conflict zones.

European postal services, including those in Sweden, Germany, and France, are temporarily halting shipments to the USA due to new tariff regulations announced by President Trump. The changes, effective from August 29, remove tax exemptions on small packages, prompting a significant response from postal companies across Europe.

Swedish pension funds are under scrutiny for investing in ICL Group, an Israeli company criticized for producing white phosphorus, a substance linked to severe burns and alleged use in conflict zones like Gaza and Lebanon. The Seventh AP Fund, managing pensions for millions of Swedes, holds significant shares in the company. The fund plans to investigate further, considering potential human rights violations.

The Swedish Financial Supervisory Authority cautions investors against trusting stock tips from online chat groups, highlighting the risk of 'pump and dump' schemes where fraudsters profit at the expense of others.

Electricity prices in southern Sweden are reaching record highs, sparking criticism from local leaders like Christian Sonesson. The disparity in prices across the country is attributed to reduced nuclear power production and low wind energy. Sonesson calls for government action to address the issue and expand energy resources.

Sweden's Finance Minister, Elisabeth Svantesson, held a press conference to discuss the country's economic outlook following the Riksbank's decision to maintain interest rates due to rising inflation. Despite a temporary high inflation rate, future rate cuts are anticipated. Svantesson emphasized the need for an expansive budget to combat the ongoing recession and boost household spending, aiming to revitalize the economy and reduce unemployment.

Electricity prices in southern Sweden are surging to their highest levels since winter, driven by reduced nuclear power production and low wind conditions. With forecasts predicting a dry and windless August, prices are expected to rise further, echoing the high costs seen in early 2022.

Riksbanken has decided to maintain the interest rate at 2% due to higher-than-expected inflation, despite previous hints of a potential rate cut. Experts had anticipated this decision, citing temporary summer inflation as a factor. The unchanged rate reflects caution, with potential rate cuts still possible later in the year.

The Stockholm Stock Exchange starts the week with declining prices, influenced by the recent summit between the US and Russian presidents. As anticipation builds for another meeting tonight, defense company Saab sees a rise, while other sectors face losses.

Sweden faces a prolonged shortage of domestic beef, with experts predicting the situation could persist for years. The scarcity is attributed to increased competition among slaughterhouses and a decline in livestock numbers. The industry calls for new farmers and a shift towards consuming more parts of the animal, including offal, to address the issue.

Sweden's inflation rate has increased from 2.8% to 3% in July, driven by higher prices in package holidays, car rentals, and food items like soda and chocolate. The Riksbank is expected to hold off on interest rate cuts, despite hopes for a decline in inflation towards autumn.

Amusement parks in Sweden are facing rising costs, leading to smaller candy prizes. Liseberg and other parks report that the cost of playing games has increased by up to 40% since 2021, while prize sizes have decreased by around 10%. The price of chocolate has surged by 50% over five years, prompting adjustments in prize offerings.

Despite a sluggish job market, youth unemployment in Sweden remains stable at 8.0%. While the overall unemployment rate has risen slightly, young people, especially those with higher education, are more adaptable and find jobs more easily. Gender disparities persist, with higher unemployment among young men compared to women. Experts anticipate an economic upturn that could reduce unemployment rates by next year.

The Big Mac Index indicates that the Swedish krona is significantly overvalued against the dollar and euro. With a Big Mac costing 71 SEK in Sweden and $6 in the US, the implied exchange rate is 11.80 SEK per dollar, compared to the actual rate of 9.70 SEK. This suggests a 22% overvaluation. The krona is also overvalued by 6% against the euro.

As the threat of a trade war between the US and China looms, EU may face increased exports from China, prompting calls for new tariffs. Molly Guggenheimer of Danske Bank suggests that without such measures, European companies could suffer from price pressures.

A severe frost in Turkey has led to a significant reduction in the hazelnut harvest, causing prices to surge by 34% since the start of the year. This situation highlights the vulnerability of agriculture to climate change-induced extreme weather.

Svenska Spel is on a mission to locate the winner of a 409 million kronor Eurojackpot, the third-largest in Swedish history. Despite numerous calls, the winner remains elusive, prompting potential measures like sending letters or even home visits.

The U.S. economy faces potential recession, with implications for Sweden. Economic turbulence, driven by trade policies and rising inflation, could lead to decreased growth and increased unemployment in Sweden. Experts warn of stagflation, and Sweden may need to explore new trade routes to mitigate impacts.

Sweden's inflation rate has increased from 2.8% to 3% in July, according to preliminary figures from SCB. This rise may delay the Riksbank's plans to lower interest rates, as experts suggest the economic recovery is slow. Seasonal factors like summer holidays might be influencing the inflation spike, but experts believe it may not persist.