So our economy will improve next year

A survey by Swedbank shows that 23 percent of households believe that their own finances will improve in 2024. And according to private economist Américo Fernández, that is probably quite true.

– I think it is the right thing to think. Because if we look ahead to 2024, there are finally several things going in the right direction. Overall, I’d say it’s more towards the second half of the year where it really starts to show in the wallet. So it is important to hold on and persevere until then, he says.

If we look at the most common expenses for a family with children in Sweden, household expenses have increased by an average of SEK 8,000 per month when compared to 2021.

– I would say 2022 was the worst year with an electricity price shock during the winter months and extremely expensive food prices. But this year it has been a bit similar, says Américo Fernández.

Electricity prices will drop

Food prices will continue to rise over the next year, but there are several other glimmers of light that will make our private finances better in 2024. What will mainly fall next year are electricity prices, says Américo Fernández.

– The way the forecast looks now, electricity prices will be cheaper. But it’s from these record years I should say, so it might not be perceived as much cheaper.

Interest rate peak reached

In November, the Riksbank chose not to raise the policy rate further, but left it at 4 percent. And according to Américo Fernández, the interest rate peak has now been reached.

– If you ask the Riksbank, you don’t talk about interest rate peaks, then you say interest rate break to signal that households shouldn’t calculate this. I still want to be a little more positive and state that we are at the peak of interest rates.

If we look towards 2024, we expect three reductions by the Riksbank, says Américo Fernández. He believes that at the end of 2024 we will land on a key interest rate of 3.25 percent.

The housing market is stabilizing

Américo Fernández also believes that the housing market will stabilize over the next year. Right now there is a large supply and a small demand, which has pushed down the prices of housing.

– Here we see continued downward pressure for the next six months, but around the turn of the year we can expect a gradual recovery of the housing market. And that is positive, of course.

The Swedish krona is strengthened

There is also much to suggest that the Swedish krona will strengthen over the next year.

– Now we see interest rate cuts, not only for the Riksbank, but also for the European central bank and the American central bank. When they start lowering more aggressively and we follow, it is positive for the Swedish krona. And then when we want to start traveling this summer, it may suddenly be that we get a little more vacation for our money after these two really tough years, says Américo Fernández.