Swedish Krona: Growth strong, currency soft – Societe Generale

Societe Generale’s Kit Juckes argues that Sweden’s strong growth and low inflation contrast with broader G10 dynamics, yet the Krona remains weak. He notes Sweden’s superior debt sustainability and recent data showing robust Gross Domestic Product (GDP) and minimal inflation. Despite real effective depreciation over two decades, he expects economic outperformance versus the Eurozone to eventually draw capital inflows and influence Swedish Krona (SEK) and inflation.

Krona cheap versus Euro and Pound

"... Krona has fared over the last year – rallying until February 2026 and then falling (EUR/SEK rising) in the period since then."

"In real effective terms, the krona is 6% above its 2023 lows, but it has lost 18% in real terms over the last 20 years."

"This morning’s data – core CPI inflation at 0.4% y/y and monthly GDP up 3.9% y/y, are pretty striking – even if monthly GDP data should be treated with suspicion."

"If all we look at are the inflation numbers, and nominal GDP, then the Krona is likely to remain soft."

"But the country’s economic out-performance relative to the Eurozone will attract capital inflows and will eventually have an impact on inflation."