This photo taken on Sept. 27, 2022 shows the logo of Sweden's central bank Riksbank in Stockholm, Sweden. (Xinhua/Fu Yiming)
The rate hike, which will go into effect on Feb. 15, is necessary as the country's 12-month consumer price index (CPI) hit 12.3 percent in December, the highest since February 1991, says the Riksbank.
STOCKHOLM, Feb. 9 (Xinhua) -- Sweden's central bank (Riksbank) announced on Thursday a 50-percentage-point key interest rate hike to 3 percent, the highest in 15 years.
The Riksbank said the rate hike, which would go into effect on Feb. 15, was necessary as the country's 12-month consumer price index (CPI) hit 12.3 percent in December, the highest since February 1991.
"Towards the end of the year (2022), however, demand fell clearly and the (economic) downturn looks likely to continue this year," the Riksbank said in a press release.
People shop at a store in Stockholm, Sweden, on Feb. 6, 2023. (Photo by Wei Xuechao/Xinhua)
"The high inflation undermines households' purchasing power and makes it difficult for them and for companies to plan their finances," it added.
This is the fifth rate hike since May 2022, and the Riksbank also said that further hikes were likely this spring.
The Riksbank also said that the country's gross domestic product (GDP) was expected to shrink by 1.1 percent in 2023 before starting to slowly increase again in 2024.
People shop at a store in Stockholm, Sweden, on Feb. 6, 2023. (Photo by Wei Xuechao/Xinhua)■
