Sveriges Riksbank has published an Economic Commentary assessing Sweden’s fiscal and monetary policy stances from 2006 to 2025. The analysis finds that the two policies largely moved in the same direction, with both generally expansionary or contractionary at the same time, which should have reduced economic fluctuations. Fiscal policy was generally countercyclical, becoming expansionary when forecasts indicated weak resource utilization and low inflation. Monetary policy showed no clear relationship with resource utilization but was expansionary when inflation was forecast below target and contractionary when it was forecast above target, indicating a stronger response to inflation deviations. The alignment partly reflected a period in which inflation was mostly below target and resource utilization was weaker than normal, limiting conflict between the two policy objectives.
2026-08-27Riksbank
Sveriges Riksbank analysis finds fiscal and monetary policy largely aligned from 2006 to 2025
Sveriges Riksbank finds that Swedish fiscal and monetary policy largely moved in the same direction from 2006 to 2025. Fiscal policy was generally countercyclical, while monetary policy responded more clearly to forecast deviations from the inflation target than to resource utilization.