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Swedish manufacturing confidence hits 20-year high
[STOCKHOLM] Swedish manufacturers are more optimistic than at any time in the last 20 years, boosting the outlook for an economy already gaining impetus from a supportive monetary policy and an uptick in global growth.
Business confidence in the manufacturing sector rose to 123.2 points from a revised 111.9 points in March, the highest level since 1996, the National Institute of Economic Research (NIER) said on Wednesday.
Figures on Tuesday showed seasonally adjusted unemployment reached its lowest in March since summer 2008, and the central bank is expected to raise its forecast for 2017 economic growth from 2.5 per cent when it meets on Thursday. Growth in 2016 was 3.4 per cent.
The Swedish crown gained sharply on the confidence data.
Inflation remains subdued despite the surging economy, and the Riksbank is likely to signal no change to monetary policy, with analysts in a Reuters poll unanimous in predicting rates on hold at -0.50 per cent and the continuation of a hefty quantitative easing programme until June.
"There are not so many signs that inflation is picking up,"Mats Hyden, analyst at Nordea said.
While underlying inflation hit the Riksbank's 2 per cent target for the first time in years in February, it subsequently slipped back.
The Riksbank forecasts inflation will not stabilise around its 2 per cent target until late next year, and many economists see moderate central wage agreements and the fading effects of a weaker crown keeping price pressures subdued for even longer.
Bank Nordea reckons the first rate hike will come in October 2018, later than the Riksbank forecasts.
Swedish consumer confidence rose to 103.4 points in April from 102.6 points in the previous month, NIER data also showed. Inflation expectations one year ahead fell to 2.4 per cent from 2.5 per cent in last month's survey.