Experts: weak inflation paves the way for more interest rate cuts – Swedish newspaper Svenska Dagbladet

Now waiting for further rate cuts, grooves economists.

Inflation, price change on an annual basis, rose from 0.1 percent to 0.2 percent in March. Economists had expected an inflation rate of 0.3 percent, according to a Reuters poll.

– But it does not change Our assessment is that the Riksbank will cut rates further at its next meeting in two weeks says SEB’s Chief Economist Robert Bergqvist.

SEB economists expect the central bank will cut interest rates by 0.15 percentage points to minus 0.40 percent and increase its purchases of government securities, known as quantitative easing , with an additional 50 billion to reach the target of 2 percent inflation.

– Simply put increases the Riksbank speed of the printing press, says Bergqvist.

But he is also skeptical of the Riksbank’s prospects of success. Sweden’s economy is greatly influenced by developments abroad, as exports account for such a relatively large share of the economy, our domestic market is so small that foreign factors play a greater role than for other countries.

– The Riksbank has an over-reliance on what can be achieved with interest, says Robert Bergqvist.

Statistics figures show how difficult it is for the Riksbank to get up inflation. The Riksbank can not help on factors such as oil price and digitization driving prices down.

– We believe, therefore, that the Riksbank cut rates further to -0.50 percent, says Swedbank chief economist Anna Felländer.

Although she traces that the Riksbank will support buy even more government securities, and in addition may make foreign exchange intervention to weaken the crown and thus get up inflation.