Sweden's Riksbank has published an Economic Commentary by Deputy Governor Anna Seim and Monetary Policy Department economist Jakob Almerud examining why inflation in Sweden and Norway diverged after the 2022 to 2023 inflation surge. The paper argues that Norway's higher policy rate did not necessarily mean tighter monetary policy in practice, and that Norges Bank appears to have placed greater weight than the Riksbank on stabilising the real economy. In the authors' account, that helps explain why Norwegian inflation remained above target while Swedish inflation had fallen below target in early 2026. The commentary is based on a speech Seim gave at a Norges Bank conference in March 2026 and is presented as a descriptive analysis rather than a review of past policy. The authors point to stronger real-economy performance in Norway as evidence that policy there was less contractionary, noting that Sweden's GDP gap has been negative since 2023 while Norway's remained positive in 2024. They also say the neutral interest rate may be somewhat higher in Norway, citing central bank estimates of a long-run nominal neutral rate of 2.25 to 3.5 per cent in Norway versus 1.5 to 3.0 per cent in Sweden. A comparison of the two central banks' forecasts suggests they placed similar weight on the real economy until mid-2022, after which Norges Bank's implied weight increased. The commentary says the data do not support the idea that bringing inflation down is more costly in Norway than in Sweden, notes that the Norwegian krone still weakened against the Swedish krona between 2022 and 2025 despite Norway's higher rates, and says differences in the two monetary policy mandates may have contributed to the different trade-offs.
Riksbank2026-07-02
Sweden's Riksbank publishes commentary arguing Norges Bank put more weight on the real economy after the inflation surge
Sweden's Riksbank has published an Economic Commentary arguing that Norges Bank may have run a less contractionary policy than the Riksbank after the 2022 to 2023 inflation surge, despite a higher nominal policy rate. The authors say Norway's stronger real economy, a somewhat higher neutral rate and forecast evidence point to greater emphasis on real-economy stabilisation. They add that the data do not support the view that lowering inflation is more costly in Norway and that mandate differences may have influenced the policy trade-off.