Sweden’s economy is recovering slowly. ”Households have high levels of debt and mostly variable-rate mortgages,” says Martin Flodén, Professor of Economics at Stockholm University.
Martin Flodén, Professor of Economics at Stockholm University. Photo: Johanna Säll/Stockholm University
The Swedish economy has found it harder than expected to regain momentum, and the debate now focuses on the government’s budget and the Riksbank’s decisions. The government hopes tax cuts and new spending will encourage households to spend more, while others argue it is the Riksbank that needs to act.
Martin Flodén, former Deputy Governor of the Riksbank, joins Ekonomiekot Extra on Swedish Radio.
”The fact that it is taking so long to get the economy moving again is probably closely linked to Sweden having a more interest rate-sensitive economy than many other countries. Households carry high debts and mostly variable-rate mortgages,” he says.
Ahead of the Riksbank’s upcoming interest rate decision, uncertainty remains high.
”I would guess this is one of the toughest meetings they have had in recent years. That is also reflected in the fact that, if you ask market participants and analysts, there is a wide split in opinions on what they think the Riksbank should do,” Flodén continues in the radio episode.
Listen to the radio episode (in Swedish) and more about Flodén
