Economic activity is strong and inflation is close to the target of 2 per cent. Monetary policy needs to remain expansionary for inflation to continue to be close to 2 per cent. The Executive Board of the Riksbank has therefore decided to hold the repo rate unchanged at −0.50 per cent and is expecting, as before, not to raise it until the middle of 2018. The purchases of government bonds will continue during the second half of 2017, as decided by the Executive Board in April.
The economic signals from abroad are good, but global inflation remains subdued. Compared with the forecast in July, there are now expectations of a somewhat more expansionary monetary policy in many countries that are important to Sweden.
Economic activity in Sweden is strong; GDP grew rapidly in the second quarter and the employment rate is at a historically high level. Inflation has continued to rise and in recent months been higher than expected. The outcomes are partly explained by temporary factors, but even disregarding this, inflation has been stronger than expected.
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