Nordic Outlook: A world marked by setbacks and advances Sweden: Fiscal stimulus will ease the burden on the Riksbank COVID-19 vaccine roll-outs and powerful stimulus measures are laying the groundwork for a rapid recovery, once the pandemic releases its grip on the world economy. Despite the escalating spread of infection and expanded restrictions, late 2020 was not as weak as previously feared. The full-year 2020 decline in global GDP is expected to be only 3.7 per cent, compared to our November projection of 4.4 per cent. We have marginally downgraded our 2021 forecast to 5,0 per cent, while adjusting 2022 growth almost half a percentage point higher to 4.3 percent. Exceptional crisis relief programmes will leave behind a high public debt burden and questions about inflation, but our main scenario is that the world will avoid overheating tendencies and that central banks will continue to keep interest rates and bond yields low. Due to milder restrictions, the Swedish economic cycle will be smoother than in other countries. The recovery will pick up speed in the second half of 2021, and Swedish GDP growth will reach almost 5 per cent in 2022. Low inflation is putting pressure on the Riksbank, but we believe that its key interest rate will remain at zero