At a press conference on Thursday morning, the Riksbank announced that it has decided to lower the policy rate to provide further support to the economy and contribute to stabilizing inflation at the target level. If the economic and inflation outlook remains unchanged, the policy rate may be lowered once again in the first half of 2025.

According to the Riksbank, inflation has decreased and inflationary pressure has stabilized in line with the target during the year, while growth has been low. Despite some signs of economic recovery, it remains weak.

Strengthening the economy is important in itself but is also a prerequisite for stabilizing inflation close to the target. The policy rate was lowered in a larger step in November, and the board assesses that it is appropriate to further lower the rate to provide more support for the recovery.

The board’s decision means a reduction of 0.25 percentage points to 2.5 percent. This means that the policy rate has been lowered by a total of 1.5 percentage points since May.

Uncertain global environment

The Riksbank will evaluate the need for future interest rate changes in light of the effects of previous cuts and shifts in the risk outlook for inflation and economic prospects. If the outlook remains unchanged, the policy rate may be lowered once again in the first half of 2025.

It is assessed that the outlook for inflation and the economy remains uncertain, and there are several factors that could lead to a different economic development and monetary policy than reflected in the Riksbank’s forecast.

Uncertainty is particularly high regarding developments in the global environment, including geopolitical tensions, uncertainties regarding trade policy, and government crises in Europe. There are also risks associated with the recovery in the Swedish economy and the exchange rate of the krona.