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Sweden’s central bank keeps interest rate steady at zero percent

Sweden’s central bank has predicted that its interest rate, which has not edged above a historic zero for over six years, will remain unchanged for three more years.

Sweden's central bank keeps interest rate steady at zero percent
Sweden's central bank has presented its latest monetary forecast. Photo: Fotograferna Holmberg/TT

“Despite the spread of the coronavirus having increased again, the Swedish economy has developed relatively well, supported by extensive economic policy measures,” said the central bank, the Riksbank, in its latest monetary policy report on Tuesday morning.

“The economic outlook is slightly brighter now than it was in February, but the pandemic is not over, and inflationary pressures remain low. Monetary policy needs to remain expansionary to support the economy and for inflation to be close to the target of two percent more permanently,” it added.

The Riksbank said it would continue to purchase assets within a 700 billion kronor framework as previously decided, and hold the country’s key interest rate, the repo, at zero percent. It predicted, as before, that the repo rate would remain at zero until at least 2024, and said it could also cut it below zero if necessary to stimulate inflation.

The bank took the landmark decision to slash the rate below zero in February 2015, hoping that the strategy would boost inflation to raise the price of everyday goods and services which had been stagnant, and therefore improve the Nordic nation’s economic prospects. Almost five years later, it was raised from -0.25 to zero in December 2019.

Sweden’s GDP is expected to grow 3.7 percent this year, which is higher than the Riksbank’s previous forecast of 3.0, released in February, and 3.6 percent next year (lower compared to the February forecast of 3.9). It expects Sweden’s unemployment rate to land at 8.6 percent this year, and recover slightly to 7.7 percent next year.

“Towards the summer, GDP growth is expected to gear up in Sweden and abroad,” said the bank. “However, the differences between various sectors and groups on the labour market are expected to remain substantial. The Riksbank assesses that total economic activity in Sweden will approach more normal levels towards the end of the year.”

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MONEY

How to avoid falling victim to tax scams in Sweden

Sweden's tax agency, Skatteverket, warns of an increase in scams when it's time for Swedish tax-payers to declare their taxes.

How to avoid falling victim to tax scams in Sweden

Anyone who earned more than 22,208 kronor last year received their tax returns digitally last week, marking the start of tax season.

That also means an expected peak in tax-related scams, Skatteverket warns.

Most of the scams are so-called phishing scams, meaning attempts to steal the victims’ personal information. Fraudsters may for example email a person, pretending to represent Skatteverket, and ask them for, among other things, their banking details.

“We’re seeing these in all channels. They use fake emails, SMS, letters and in some cases even phone calls. It is particularly common in tax declaration times – just when we’re about to send out the tax returns, the e-service opens and it’s possible to declare – but above all when it’s time for tax rebates,” Jan Janowski, a Skatteverket expert, told Swedish news agency TT.

A scam email might for example state that you’re entitled to a tax rebate and that you should click a link to receive it. Don’t click any links, open any attachments or reply to the message. Skatteverket advises that you immediately delete the email or text message.

Another common scam is that you receive a text message claiming to be from Skatteverket, telling you that you owe them money and you need to log in to calculate the amount. The website you’re urged to log in via does not belong to Skatteverket. Don’t click the link.

The agency stresses that it never asks people for their banking details. The exception is that you may be asked for your bank account information if you log into Skatteverket’s website to declare your taxes, but that always first requires you to log into the site.

To receive your tax rebate, you need to inform Skatteverket of your bank account number. You do this not by clicking a link in an email or SMS, but by logging into their website using a digital ID, for example BankID, and submitting your details. Only do this on your own initiative. If someone calls you and asks you to log in with your BankID during the phone call, don’t do it. That’s another common scam.

Skatteverket will also never call you to ask for your bank account or credit card number.

It will be possible to declare your taxes from March 19th. You’ll receive any tax rebate you’re owed by mid-April or early June, depending on when you submit your tax return. These are the dates when fraudsters are likely to attempt the most scams.

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