Sweden well-placed to deal with trade uncertainty, Riksbank's Seim says
"In Sweden we have stable economic-policy frameworks and strong public finances. All this puts us in a favourable position that many other countries lack," Seim said.
The Riksbank held its key interest rate at 2.25% at its latest meeting, on March 20, and forecast unchanged rates for the foreseeable future though uncertainty, not least linked to U.S. policy moves and global trade, is unusually great.
Since then President Donald Trump's sweeping new tariffs and the market turbulence surrounding them have unsettled the outlook still further. Trump said on Wednesday he was again increasing tariffs on China but pausing recent hikes for others.
Seim said Sweden's position was good despite details of Trump's trade policy remaining unclear and the uncertainty making assessing developments in economic activity and inflation unusually difficult.
"It's hard to assess the effects of these tariffs - we think they will be inflationary but mainly in the U.S., but we could have some contagion on the Swedish economy," Seim said in a presentation.
"We are vigilant and ready to act if developments so require," she said.
Analysts at several of Sweden's biggest banks, whose predictions had largely chimed with the Riksbank rate forecast, have in recent days predicted the trade turmoil and related economic downturn may lead to one or more rate cuts this year.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
16 minutes ago
- Reuters
Estee Lauder forecasts annual profit below estimates as tariffs hit
Aug 20 (Reuters) - Estee Lauder (EL.N), opens new tab forecast annual profit below Wall Street estimates on Wednesday, as the cosmetics giant grapples with persistent weakness in the U.S. and China markets and tariff uncertainty, sending its shares down about 9% in premarket trading. The company also said it expects a hit of about $100 million to its 2026 profit from tariff-related headwinds. The Trump administration's unpredictable trade policies have strained consumers' wallets as well as put an operational strain on businesses, forcing companies to find ways to counter tariff impact while devising strategies to reignite growth. Estee's organic net sales for the fourth quarter fell 13%, compared with an 8% rise a year ago, primarily hurt by weakness in the skincare and makeup segments. To revive sales, Estee Lauder has been accelerating new launches in categories including skincare, introducing new luxury price tiers, increasing investments and implementing cost-savings measures, under new CEO Stephane de La Faverie, who took up the top job earlier this year. The MAC lipstick maker has previously said it expects to take restructuring charges between $1.2 billion and $1.6 billion, before taxes in 2026. The company expects full-year adjusted earnings per share to be in the range of $1.90 to $2.10, compared with analysts' estimates of $2.21, according to data compiled by LSEG.
Reuters
16 minutes ago
- Reuters
Switzerland moves to strengthen its competitiveness after US tariffs
ZURICH, Aug 20 (Reuters) - Switzerland is intensifying efforts to strengthen its attractiveness as a business location, its government said on Wednesday, after being hit with some of the highest U.S. tariffs worldwide. Efforts will focus on regulatory relief for Swiss companies, and new rules incurring high costs for businesses could be pushed back, the government said in a statement. U.S. President Donald Trump this month imposed U.S. import tariffs of 39% on Swiss goods, though pharmaceuticals and some other sectors have so far been spared the duties. "(The government) wants to decisively press ahead with its economic policy agenda and is focusing on reducing the regulatory burden on companies," the government said. Geographical diversification and Swiss companies' access to alternative international markets should also be strengthened, the statement said. The new U.S. levies currently affect around 10% of Swiss goods exports, and could have potentially severe consequences for some companies, the government said. Switzerland does not anticipate a recession akin to the global financial crisis or the pandemic, it added.
Reuters
16 minutes ago
- Reuters
India stocks set for modest gains as US tariffs, foreign outflows cloud outlook
BENGALURU, Aug 20 (Reuters) - Pressured by U.S. tariffs and foreign investor outflows, India's stock markets will manage to eke out only modest gains by year-end, according to a Reuters poll of equity analysts who have pushed back their forecast for a new record high to 2026. Foreign investors have sold more than a net $13 billion of Indian stocks this year, including around $2.4 billion in the first half of August after U.S. President Donald Trump raised tariffs on Indian exports to 50% - among the steepest imposed on any U.S. trading partner. The 5.2% rise in the blue-chip Nifty 50 (.NSEI), opens new tab index so far this year lags broader Asian (.MIAPJ0000PUS), opens new tab and emerging markets (.MIEF00000PUS), opens new tab, which have gained 17.2% and 18.2%, respectively. If the trend continues it would be the first time in five years that the Nifty underperformed those indices. The Nifty 50 is forecast to rise about 3.9% to 25,834 by the end of this year, before reaching 26,500 by mid-2026 and 27,950 by end-2026, according to an August 8-20 poll of 20 equity analysts. Those forecasts are lower than in the previous quarterly survey, with a new record high now not seen until 2026. The BSE Sensex is seen climbing to 85,100 this year, 86,875 by mid-2026 and 91,370 by end-2026. "Until foreign investors are confident in the Indian economy and earnings...I don't think we'll see a substantial rise from here. The danger is they will use every rise to dump their stocks," said Yogesh Kalinge, associate director of research at A.K. Capital Services. "Trump keeps firing tariff volleys, the wind changes every week and honestly it's just hope and speculation keeping this market afloat." Around a third of analysts who usually take part in the poll did not provide forecasts this quarter, with some saying the market has become increasingly difficult to predict. Rajat Agarwal, Asia equity strategist at Societe Generale, who did participate, said weak economic data, tariff uncertainty and tepid earnings meant foreign inflows may take time to return. While India is the world's fastest-growing major economy, expected to expand 6.4% this fiscal year, its listed companies have reported only single-digit profit growth for five straight quarters. That is a sharp slowdown from the 15-25% expansion recorded between 2020-21 and 2023-24, a period over which the Nifty 50 rose around 160%. No major improvement is expected over the coming quarters. A majority of analysts, 16 of 21, said corporate earnings in the Indian stock market would edge up only marginally in the second half of 2025 from the first half, while two expected a significant increase. An expected cut to the goods and services tax (GST) in October to boost household consumption may also help shore up earnings, although analysts say the full impact will take time to filter through the economy. Valuations remain a concern. India's Sensex trades at 23 times forward earnings, among the world's highest, nearly matching Wall Street's S&P 500, LSEG data showed. HDFC Securities senior derivative analyst Subash Gangadharan said the GST cut was a positive step but would have limited impact given already sky-high valuations, and predicted the Nifty 50 to fall to 22,000 by end-2025. (Other stories from the Reuters Q3 global stock markets poll package)
