Nordic Outlook: It will soon be time to phase o...

Crisis policies are beginning to have an impact, in the form of
greater stability in the world economy. Due to growing risk appetite
and better-functioning credit markets, the effectiveness of such
policies is increasing. Looking ahead, economic policymakers face the
dual challenge of ensuring continued momentum towards recovery, while
avoiding new financial bubbles and excesses. This means that the
"monetary insurance" against collapse taken out during the past year
in the form of extraordinary key interest rate cuts and liquidity
injections will soon start to be phased out. Central banks will hike
key rates in 2010 and 2011 despite historically low inflation and
wage pressure, high unemployment and below-trend growth.


Sweden's Riksbank is no exception. It will raise its repo rate to 2
per cent late in 2010 and to 3 per cent during 2011. This implies
that monetary policy will still remain expansive. Swedish GDP growth
will reach 1.7 per cent in 2010 and 2.6 per cent in 2011; inflation
will be kept down by low resource utilisation and historically low
pay increases; unemployment will climb to 11 per cent during 2010,
then decline slowly. The government will add another SEK 25 billion
in fiscal stimulus in its autumn budget. The budget will be expansive
in 2011 as well, regardless of whether the non-socialist Alliance
stays in power or a left-leaning government takes over after the
September 2010 election. The public opinion situation adds extra
uncertainty about the formation of a new government and thus about
the economic policy climate after 2010, SEB's economists write in the
latest issue of Nordic Outlook.

"The prospects for economic growth have clearly improved, compared to
the severe crisis situation this past winter. Greater stability will
lay the groundwork for decent growth," says Robert Bergqvist, Chief
Economist at SEB. "Inventory build-up and short-term stimulus
measures will lead to a positive rebound in economic growth in the
next six months. Uncertainty about household consumption and
corporate capital spending create doubts about the strength and
sustainability of this growth," Mr Bergqvist says.

"The global banking system needs more time to normalise and
consolidate," he continues. "Credit supply is now functioning
satisfactorily with the help of the securities market, but the system
seems to be relying on hopes of a long-lasting government presence
and on the central banks as holders of credit risk. This means that
risk-taking is being incorrectly priced, thereby increasing the
hazards of inefficient credit allocation and new imbalances. It is a
challenge to central banks and will accelerate their interest rate
hikes," Mr Bergqvist concludes.

The way that economists have viewed inflation has varied over the
past year - from an oil price shock and fears of inflation in the
summer of 2008 to deflation worries during the winter and subsequent
concerns that inflation would be triggered by expansive monetary
policies. These changes have led to large movements in the fixed
income market.

"Resource utilisation remains low, and unemployment is high. Global
wage and salary growth is falling significantly, which will help keep
inflation low in 2010 and 2011," says Håkan Frisén, SEB's Head of
Economic Research and editor in chief of Nordic Outlook. "Cyclical
forces will improve productivity, leading to lower cost pressure for
companies and enabling households to maintain their purchasing power.
We believe that interest rates will behave more calmly in the coming
months, with long-term yields continuing upward a bit and then
falling somewhat in 2010," Mr Frisén says.

The American consumer has faced tough challenges in recent years.
Short-term federal stimulus measures have been enacted. As a result
the US economy has stopped declining, and economic growth is
improving.

"We expect a rebound in US growth during the second half of 2009 with
the help of inventory effects, targeted measures aimed at boosting
consumption such as the 'cash for clunkers' auto rebates and
subsidies to young first-time buyers in the real estate market," says
Mattias Bruér, US analyst at SEB Economic Research. "Our analysis of
historical turning points shows that households play a pivotal role
in economic recovery. This time around, there is very great
uncertainty. Households have begun saving money and are expected to
boost their savings ratio another couple of percentage points as a
consequence of earlier home price declines and the continued rise in
unemployment. This clouds the future economic outlook," Mr Bruér
says.

The German economy will play a key role for the economic recovery in
Europe.

"Germany was exceptionally hard hit by the industrial downturn last
winter," says Tomas Lindström, euro zone analyst at SEB Economic
Research. "But today we can see some bright spots, and the rebound
may be stronger than in many other countries once the recovery takes
off. Meanwhile there are euro zone countries that are still severely
affected by the financial and housing crisis. This shows what a
difficult situation the European Central Bank is in when it comes to
choosing the right time to begin its rate-hiking cycle," Mr Lindström
says.

The outlook for the Swedish economy has improved.

"Sweden has a good starting position. The manufacturing sector may
benefit from the international upturn and a weak krona, while the
central government and the private sector have strong balance
sheets," says Håkan Frisén. "Swedish mortgage interest rates are very
low in international terms, which may explain why home prices in
Sweden have not fallen as in other countries. Today many households
have floating-rate loans, which make the Riksbank's interest rate
weapon extra powerful. On the other hand, this also implies risks
that we will experience negative effects in the housing market at a
later stage than other countries, as interest rate hikes begin."

Key figures: International and Swedish economy

+-------------------------------------------------------------------+
| International economy. GDP,         | 2008  | 2009  | 2010 | 2011 |
| year-on-year change, %              |       |       |      |      |
|-------------------------------------+-------+-------+------+------|
| United States                       |  0.4  | -2.5  | 1.8  | 2.3  |
|-------------------------------------+-------+-------+------+------|
| Euro zone                           |  0.6  | -3.9  | 1.2  | 1.8  |
|-------------------------------------+-------+-------+------+------|
| Japan                               | -0.7  | -5.6  | 1.5  | 1.9  |
|-------------------------------------+-------+-------+------+------|
| OECD countries                      |  0.6  | -3.9  | 1.3  | 1.9  |
|-------------------------------------+-------+-------+------+------|
| China                               |  9.0  |  8.0  | 8.0  | 8.0  |
|-------------------------------------+-------+-------+------+------|
| Baltic countries                    | -1.0  | -15.6 | -2.6 | 3.2  |
|-------------------------------------+-------+-------+------+------|
| The world                           |  3.1  | -0.9  | 3.4  | 4.1  |
|-------------------------------------+-------+-------+------+------|
| Swedish economy. Year-on-year       | 2008  | 2009  | 2010 | 2011 |
| changes, %                          |       |       |      |      |
|-------------------------------------+-------+-------+------+------|
| GDP, working day adjusted           | -0.5  | -4.9  | 1.7  | 2.6  |
|-------------------------------------+-------+-------+------+------|
| BNP, actual                         | -0.2  | -5.0  | 2.0  | 2.6  |
|-------------------------------------+-------+-------+------+------|
| Unemployment, % (EU definition)     |  6.2  |  8.4  | 10.5 | 10.7 |
|-------------------------------------+-------+-------+------+------|
| Consumer Price Index (CPI)          |  3.4  | -0.2  | 1.6  | 2.1  |
| inflation                           |       |       |      |      |
|-------------------------------------+-------+-------+------+------|
| Public sector financial balance, %  |  2.5  | -2.6  | -4.0 | -3.9 |
| of GDP                              |       |       |      |      |
|-------------------------------------+-------+-------+------+------|
| Repo rate (December)                | 2.00  | 0.25  | 2.00 | 3.00 |
|-------------------------------------+-------+-------+------+------|
| Exchange rate, EUR/SEK (December)   | 10.92 | 9.75  | 9.50 | 9.30 |
+-------------------------------------------------------------------+


SEB is a Northern European financial group serving some 400,000
corporate customers and institutions and five million private
individuals. SEB offers universal banking services in Sweden, Germany
and the three Baltic countries - Estonia, Latvia and Lithuania. It
also has a local presence in the other Nordic countries, Poland,
Ukraine and Russia and a global presence through its international
network in another ten countries. On June 30, 2009, the Group's total
assets amounted to SEK 2,374 billion and its assets under management
totalled SEK 1,267 billion. The SEB Group has about 20,500 employees.
Read more about SEB at www.sebgroup.com.
_____________________________________________
For further information, please contact:

Robert Bergqvist, [phone]    Mattias Bruér, [phone]
Håkan Frisén, [phone]        Mikael Johansson, [phone]
Tomas Lindström, [phone]      Olle Holmgren, [phone]
Elisabeth Lennhede, Press & PR, [phone],
[e-mail]


This announcement was originally distributed by Hugin. The issuer is 
solely responsible for the content of this announcement.