‘It is difficult to finely calibrate the tightening of economic policy’

There are many storm clouds gathering: an economic downturn, high inflation and a geopolitical tremor. Looking ahead, what worries you the most?

– That a tight economic policy will slow down the economy too much. There is so much uncertainty regarding inflation that it is difficult to finely calibrate the tightening of economic policy. We now see the central banks, for example in the United States and Sweden, hiking up interest rates to defeat inflation. Moreover, there is the danger of a geopolitical escalation in Europe.

Is Sweden structurally able to meet these challenges?

– Sweden has a competitive economy and also a strong economic-political framework. This, in combination with the proven ability of political parties to work together in times of crisis, means there is little danger of Sweden not overcoming the economic difficulties in the long term. As for the geopolitical danger we are facing, Sweden’s EU membership is the cornerstone of Swedish security.

What will eventually make the outlook brighter again?

– We know from the past that we can tackle high inflation, so the problems are not structural. Once we stabilise inflation, all the conditions will be in place for the Swedish economy to continue growing normally. Sweden also has a good reputation in the world for international cooperation, so the conditions are also in place for good international relations, which is the basis for long-term security.

Alexandra Stråberg was interviewed by Malin Sahlén, Director of Operations & Partner at New Republic. ‘Three Quick Questions…’ is a series of interviews conducted by New Republic.