Account of Monetary Policy, 2015


What determined the Executive Board’s monetary policy decisions in 2015? How well do the Riksbank’s forecasts stand up against others? What is the Riksbank doing to develop its monetary policy analysis? These and other questions are answered in the Riksbank’s Account of Monetary Policy, 2015. The report forms part of the material for the annual assessment of monetary policy by the Riksdag Committee on Finance.

2015 started with low inflation and falling inflation expectations...

At the beginning of 2015, inflation was still very low and inflation expectations fell in a worrying manner. The Riksbank continued with its expansionary monetary policy to uphold confidence in the inflation target as a benchmark for price-setting and wage formation. The repo rate was cut to negative figures and the Riksbank began to buy government bonds on a large scale.

...but finished with stronger economic activity and higher inflation

The Riksbank's monetary policy has contributed towards economic activity improving: growth was high in 2015 and unemployment fell. At the same time, inflation rose and long-term inflation expectations stabilised.

Inflation was restrained by, among other things, low energy prices

Inflation was higher in 2015 than in 2014, but was restrained by falling energy prices, the effects of the Riksbank's interest rate cuts on household mortgage rates and other factors. If energy prices and interest effects are excluded, inflation was 1.4 per cent in 2015.

The Riksbank's forecasts hold up well

The Riksbank is relatively good at making forecasts of GDP growth and unemployment. If different analysts' forecasts for the period 2007–2015 are compared, the differences in forecasting performance are very minor. For example, on average, one-tenth of a percentage point separates the Riksbank and the best forecaster of inflation.

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