Global: Signs of a considerable cyclical upturn in advanced economies. Inflation pressure increases, but remains low in many regions. Political risks remain although they have decreased somewhat.
- Sweden: Growth broadens as an upswing in exports is paired with the strong domestic economy. Demographic change continues to drive the development. The labour market is strong but modest wage increases slow down the rise in inflation. Public finances are solid but structural reforms neglected.
- Norway: Growth accelerates at the same time as the downswing in the oil sector dampens. We estimate that oil price continues to rise which lends support. The overheated housing market is a risk, but given that housing prices stay stable we expect that Norges Bank raises its policy rate in the second half of next year.
- Baltics: The business cycle in the Baltic economies strengthened towards the end of last year, driven primarily by household consumption and exports. There is a risk that the rising wages erode competitiveness, but we expect the strong global cycle to support exports.
- Markets: A tentative interest rate upswing has begun as central banks slowly retreat
Swedbank Economic Outlook Update April 2017
