By ENDA CURRAN
SYDNEY—Sweden’s central bank plans to lift its growth forecast as the Scandinavian economy continues to shake off the euro-zone crisis, a top central bank official said Monday.
In an interview in Sydney with The Wall Street Journal, Per Jansson, deputy governor of Sweden’s Riksbank, said the nation’s exports are continuing to hold up well and that the pace of growth in the first half of the year was a positive surprise.
“We will have to revise it up in the short term,” said Mr. Jansson, referring to the bank’s economic outlook.
Riksbank has an inflation target of 2% and the krona is about 9% higher against the euro than it was in May. Sweden and other Scandinavian nations such as Norway have taken on safe-haven status, with their triple-A credit ratings and stable outlooks luring investors and pushing up the value of their currencies. That has raised concern that uncompetitive exchange rates could hurt industrial exports in key markets, forcing Scandinavian central banks to either cut rates, or intervene.
Ahead of a Sept. 6 policy meeting, Mr. Jansson said the bank is on hold and watching developments in Europe.
“We are on hold at the moment and looking at things the big Europe risk is one that we have to monitor carefully. But Sweden’s economy itself is doing quite well so there are things to be balanced there,” said Mr. Jansson, who is in Sydney to attend a gathering hosted by the Reserve Bank of Australia.
Exports make up half of Sweden’s gross domestic product, and the country’s historic reliance on the euro zone as a destination for its goods has been a recent point of concern amid general strength for the Swedish economy and currency. The euro zone takes about 35% of the goods shipped from Sweden.
“In terms of hurting industry, it would have to become stronger than at the moment,” said Mr. Jansson, in reference to the strength of the krona.
Sweden’s economy has performed well this year. Output in the period from April to June increased 1.4% from the previous period and 2.3% from a year earlier, according to the latest data. The country has cultivated a reputation for fiscal discipline since suffering a financial crisis of its own in the early 1990s.
Growth rates in Sweden compare favorably to a wide swath of European nations. The country far outshone euro-zone laggard Spain, where the economy contracted 1% in the second quarter in annual terms. The U.K. economy, not part of the euro zone but a major trading partner, contracted by 0.8% over the same period.
Write to Enda Curran at enda.curran@wsj.com
Article source: http://online.wsj.com/article/SB10000872396390443855804577600431621935446.html?mod=rss_economy
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