On Wednesday, the Riksbank will issue a new interest rate announcement and leading economists disagree on which way the authority should go. Some believe that further hikes are required to curb the still high inflation, while others think that the Riksbank should have ice in its stomach.
The split becomes clear when Mattias Persson, chief economist at Swedbank, and Laura Hartman, chief economist at LO, debate the issue in Aktuellt.
"Inflation is persistent"
Mattias Persson emphasizes that inflation remains "far too high".
"My view is also that inflation is persistent. It will come down, given that the Riksbank raises interest rates. But it will take a little longer. And it's risky not to act," he says.
But according to Laura Hartman, it would be better if the Riksbank waits for the effects of the hikes already made.
"Housing investment is plummeting and consumption is falling sharply. We have had major consequences and households risk becoming more cracked with each interest rate hike," she says.
"The interest rate weapon not so effective"
She also believes that inflation in Sweden is to a fairly large extent an imported problem as a result of, among other things, the war in Ukraine.
"Inflation is a huge problem, but the interest rate weapon is not so effective against inflation coming from abroad," she says.
That picture is not shared by Mattias Persson.
"When inflation started to pick up, there were a lot of war effects and pandemic effects. But if you look at underlying inflation today, it is broad-based. All commodities are largely rising, so these are no longer just commodity prices. This is a much broader and more persistent inflation," he said.
Watch the debate in the video player above.