Riksbank Governor Teiden said on Sunday they may have underestimated inflationary pressures and would likely have to stick to their forecast for another rate hike in April.
The Riksbank has raised interest rates to 3% from 0% a year ago, but has failed to curb inflation as high as 9.4%.
The bank raised rates by 50 basis points in February and said it would raise rates by another 25 or 50 basis points in April. Some economists have urged the Riksbank to pause its rate hike cycle, arguing that higher rates could derail the rate-sensitive Swedish economy or trigger a financial crisis.
However, the main scenario remains for a 25 or 50 basis point hike in April, Teiden said, adding that inflation outcomes since the February monetary policy decision have been worse than expected.
“We forecast that inflation will come down very quickly. The problem is we have been forecasting that for all of 2022 and it hasn’t happened yet,” Teiden said.