The Riksbank must lower the interest rate by 50 basis points.
Otherwise, flosing jobs and more companies going bankrupt – that’s what Swedbank’s chief economist Mattias Persson thinks.
– We risk ending up in this recession longer than we need to, he says.
Tomorrow there will be a new interest rate announcement from the Riksbank. That the policy rate is lowered by at least 0.25 percentage points is seen as bombproof. At the same time, some economists believe that the Riksbank should strike with a double reduction – and that the recession could otherwise last even longer.
Mattias Persson, Chief Economist Swedbank, is one of those who roars. He believes that the Riksbank will “unfortunately” stick to its communication plan.
– You should lower it by 50 points. It is still the case that consumers hold on to their money. I think households have burned out on this global inflationary shock we’ve had, they’re holding on to their money. People want to see that the Riksbank delivers, that’s what I hear when I meet clients. Then it is not enough just to communicate, you have to be proactive, he says.
That could be the consequences
What will be the consequences if the Riksbank does not proceed as quickly as you would like?
– The risks are that the labor market deteriorates further. It is already in the cards now. This means that the recovery that we are waiting for will come in Sweden with strong growth in 2025 and 2026, it is pushed further into the future. We risk being stuck in this recession longer than we need to. More people lose their jobs and more companies go bankrupt.
Can send a crisis signal
Robert Boije, SBAB chief economist, also believes that there will be a reduction of 25 points. But with a fragile Swedish economy, he believes that a larger reduction could be justified.
– 50 points would not be completely unjustified. But that would violate the Riksbank’s previous communication, which I also think is a bit unfortunate.
Had it been a crisis signal?
– Yes, but maybe a little. Now it may not be decisive with a 25 or 50 point drop. But a little on the margin, it could send a bit of a crisis signal.