The global financial crisis would dissipate in 2009 and the Swedish economy would recover in 2010, Sweden's central bank Riksbank said Friday.
"We expect the financial crisis to peter out during the course of the year that has just begun," Barbro Wickman-Parak, Riksbank deputy governor, said in a statement.
"A large part of the explanation comprises falling energy prices and falling interest expenditure. These are factors that are favorable to growth," she said.
Inflation would continue to drop rapidly over the coming year, Wickman-Parak added, "It should not be confused with a prolonged process with falling prices that affects long-term inflation expectations."
Riksbank will continue to analyze the situation and discuss the need for regulatory changes, but the worst of the current crisis is expected to pass in the year ahead, according to the statement.
The most devastating financial turmoil in 80 years, which started in the U.S. mortgage lending market, has dragged the euro zone economy into recession, with its impact on the real economy becoming more obvious.
Source: Xinhua
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