Big banks split on Swedish economy's recovery and interest rate path

For 2027 and 2028, the bank anticipates growth of 2.9 percent and 2.0 percent, respectively.

Factored into their forecast are two interest rate hikes by the Riksbank – in March and September next year – which would bring the key policy rate up from today's 1.75 percent to 2.25 percent.

"Uncertainty remains high, but both growth and markets continue to demonstrate resilience and a high capacity to adapt. The rise in oil prices is being contained thanks, in part, to new transport routes," SEB stated.

Economists at Swedbank take a less optimistic view of the future, predicting that the Riksbank will begin raising the policy rate as early as this year, eventually reaching 2.25 percent in 2027.

"The recovery of the Swedish economy is under way, with annual growth expected to hover around two percent between 2026 and 2028. Rising inflation means that the Riksbank will start normalising monetary policy towards the end of the year," Swedbank wrote in a report