Wednesday, 11 February 2009

Sweden Economy on Free Fall...

"Sweden Lowers Main Interest Rate to 1% on Recession.

Governor Stefan Ingves is cutting borrowing costs more than his counterparts at Norway’s Norges Bank and the European Central Bank as he struggles to contain the fallout from a deepening recession in the biggest Nordic economy.

Swedish unemployment will double to 12 percent by 2010, and gross domestic product may shrink 1.7 percent this year, Swedbank AB, Sweden’s biggest bank by branches, forecasts.

Sweden's central bank said it could not rule out rates at zero given that the economy has worsened sharply.

The repo rate is now at its lowest level since its introduction in 1994 and marks the lowest official Swedish interest rate since records began in 1907.

UK, US, Russia, now Sweden...which country can still support Finnish export?I guess none, thus this temporary layoff to cut capacity...then on top of that the strength of the Euro is hurting very hard exporters(The Swedish Krona, and the Russian Rouble have been falling very abruptly, which somehow will boost their export).

Remember the monetary policy is directly targeted to Germany and maybe France..the rest will have to live with it.

If Finland was out of the Euro monetary system, they will have slashed interest rates and the ex-"Markka" would have plummeted providing some breathing to export oriented company. But no luck, it won't happen...

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