Swedish Krona: Growth and future rate outlook favour SEK – Societe Generale
Kit Juckes at Societe Generale argues that Swedish Krona (SEK) is poised to benefit from Sweden’s superior growth outlook and expected Riksbank tightening.
Societe Generale's Kit Juckes suggests that the Swedish Krona (SEK) stands to gain from Sweden's robust growth projections and anticipated Riksbank rate hikes. Despite inflation keeping rates modest for now, Juckes anticipates a shift in the foreign exchange landscape, with Sweden projected to expand by 2.2% in both 2026 and 2027, surpassing Norway and Switzerland.
The Swedish currency is likely to benefit the most from decisions made by the Riksbank, Swiss National Bank, and Norges Bank. Although the likelihood of a Riksbank move is currently minimal, a 90% chance is expected in November, with a possible second hike in the first quarter of next year. Consensus growth forecasts for Sweden in 2026 stand at 2.2%, significantly ahead of other European nations.
Switzerland follows with a 1.3% growth projection for the upcoming year, while the UK, Norway, and the Eurozone lag behind at 1.2%, 1.0%, and 0.9%, respectively. While Swedish interest rates currently remain low due to weak inflation, the outlook for Swedish rates is expected to change sooner or later. By 2027, Sweden's GDP growth forecast remains at 2.2%, outpacing Norway and Switzerland, which are predicted to grow by only 1.4%.
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