Investment Outlook for Nordic Central Banks

Analysts from Nordea Bank Abp (OTC:NRDBY) predict that the central banks of Sweden and Norway will conclude their current easing cycle within six months. An anticipated rebound in domestic demand is expected across the Nordic region.

The Riksbank in Sweden and Norges Bank in Norway are projected to reach their terminal rates by July, set at 2% and 4% respectively. These rates are 50 basis points below their current levels, according to the largest lender in the Nordic region’s latest economic outlook, released Wednesday.

Nordea’s forecast for Sweden aligns with the consensus from the latest Bloomberg survey of economists. The bank had previously predicted that the Riksbank would reach the 2% key rate by the end of the year.

Contrastingly, Nordea’s projections for Norway are notably lower than Bloomberg’s median forecast. The survey shows a consistent decline in Norges Bank’s key rate into next year, with borrowing costs expected to hit 2.9%.

In contrast, Nordea’s September forecast anticipates three quarter-point cuts, reducing the rate to 3.75% by year-end 2024.

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