Nordic Central Banks Expected to Adjust Monetary Policies

Economists surveyed by institutions now anticipate that both the Norwegian and Swedish central banks will tighten monetary policy over the next 12 months. According to the median of a survey of 16 economists, the Norwegian central bank is expected to raise its key interest rate by 25 basis points to 4.25% this quarter, followed by a similar rate cut in the second quarter of next year. Previously, it was forecasted that borrowing costs would remain unchanged until early 2027. Another survey of 21 economists indicates that the Swedish central bank is expected to raise its policy rate to 2% in the first quarter of next year and maintain this level throughout 2027. In the previous survey, they expected the rate to remain at 1.75% until the third quarter of 2027. Policymakers from these two Nordic countries will announce their next steps at a so-called 'interim meeting' on May 7, which will not include new interest rate or economic forecasts. According to Jin10, these developments reflect a shift in monetary policy expectations for the region.