As summer vacations draw to a close, economic activities resume in Sweden under a cloud of prevailing uncertainty, casting shadows over the nation's financial prospects. Both economic and

political challenges have converged, leading analysts to assert that these adverse trends are contributing to a growing lack of investor confidence in the Swedish krona.

On August 21, the krona plunged to its lowest point against the euro, with an exchange rate of €1 for 11.96 kronor – a significant drop from the 10.24 kronor recorded in August 2021, marking a decline of over 16% in just two years. The private bank Swedbank, located in Stockholm, indicated that the situation had not yet stabilized two days later.

"It's likely to worsen before it improves," commented Mattias Persson, the bank's chief economist. Swedbank not only anticipates that the inflation rate, which stood at 9.3% year-on-year in July, will remain elevated, but also foresees additional increases in interest rates. The Riksbank, Sweden's central bank, has already set its key rate at 3.75%, with expectations for it to rise to 4.25% by year-end. Photo by Carl von Blixen, Wikimedia commons.