Rise predicted Sweden’s interest rates

Sweden's GDP is expected to rise by 4.5 percent this year, according to Swedish bank SEB's growth report. GDP will rise by 3.5 percent next year and 2.4 percent in 2008.

Unemployment, which will be 5.4 percent this year, will fall to 5.2 percent next year and 4.5 percent in 2008.

Inflation, measured to exclude changes in mortgage payment and the changes in the net amount of altered indirect taxes and subsidies, will be 1.2 percent this year, 1.1 percent next year and 1.5 percent in 2008, SEB predicts.

The bank expects that the Riksbank will raise interest rates. By December this year they will be 3 percent and in one year they will stand at 4 percent, where they will remain for at least one year.

The bank expects the krona to strengthen against the euro, with a value of 9 kronor in December this year, 8.90 in December next year and 8.80 one year later.