The Riksbank's current forecasts:
Even though infection rates have escalated and restrictions have been imposed in the spring, the global economy is still recovering. Vaccination rates are that, and with significant fiscal and monetary policy support, circumstances are favourable for demand to rebound quickly, including in contact-intensive service industries, once constraints are lifted. However, there is still a lot of volatility, and the rate of recovery differs a lot across industries and countries.
Both in Sweden and abroad, development is projected to pick up in the coming months. The disparities in the labour market across different industries and classes are likely to persist, but aggregate economic growth is expected to return to more usual levels by the end of the year. The labour market would improve, even though unemployment is likely to continue at a somewhat higher degree for a longer time as a consequence of the crisis's long-term consequences.
The increased use of resources provides the conditions for inflation to grow, however cost pressures are likely to rise steadily. Significant fluctuations in inflation are forecast this year, much as they were in 2020. It will take until the end of the prediction cycle for inflation to return to a more stable level above the 2% target.
In order to sustain the economy and inflation in the coming years, expansionary monetary policy would be needed. As a result, the Riksbank will continue to buy assets within the SEK 700 billion budget and provide liquidity to many of the programmes that have been initiated. The Executive Board has already voted to keep the repo rate at zero percent, which is likely to be maintained for the far future. The Riksbank would design monetary policy in such a way that it provides extensive monetary policy support for as long as it is needed to support the recovery and inflation.