One factor driving the development is higher electricity prices, but other prices are also pointing upwards, the bank writes in the report.
At the same time, SEB’s economists lower their forecast for GDP development in 2023 to a reduction of 1.5 percent. As recently as August, SEB expected zero growth next year.
Housing prices are assumed to continue down despite the 10 percent fall since the peak in February. In total, the decline is estimated to be 20 percent, with a bottom somewhere in the summer of 2023.
However, it could be worse than that, according to the bank’s economists:
“The risks are clearly directed to the downside”.
The Riksbank is expected to continue raising the policy rate to 2.75 percent in February 2023 and, if inflation slows down, may begin lowering the policy rate in the second half of 2024 down to 2.25 percent at the end of the year.
Unemployment is expected to rise from this year’s 7.4 to 8.2 percent before leveling off sometime in 2024, according to the forecast update.
Wages are estimated to rise by a total of 4.5 percent in 2023 and by 3.5 percent the following year, according to the forecast.