The holiday season is in full swing and summer has so far brought a mix of sun, rain and positive macroeconomic news. But what does it really mean for you as an entrepreneur and what can you expect going forward?

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Inflation is finally falling

Inflation in Sweden has fallen continuously since the peak in December 2022. However, May was disappointing when the inflation figure was unchanged from April and higher than estimated. June, on the other hand, offered really positive news. After being above the Riksbank's target of 2 percent since August 2021, inflation ended up at 1.3 percent according to the CPIF, which is the measure the Riksbank uses. A figure that was lower than both the Riksbank and the market's forecast.

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This is positive news for business owners on several fronts. Inflation puts customers at risk of cutting back on business as their overheads increase. But it also affects business owners in the same way it affects consumers, with high inflation leading to cost increases on purchases of both goods and services. Having more price-sensitive customers while suffering cost increases yourself is a difficult balancing act, but the fact that inflation is now falling will hopefully bring things closer to normal. 

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Bankruptcies are declining

Another piece of positive news from the summer was that the credit reference agency UC reported that bankruptcies fell for the first time in two years. However, bankruptcies remain at record highs for the year as a whole, but a decline gives us optimism for the second half of the year. Just as inflation has several effects, so do bankruptcies. Reducing the number of bankruptcies therefore has a positive impact throughout the supply chain. 

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Key interest rate likely to be cut

So far this year, the Riksbank has cut the policy rate by 0.25 percent in May and in its latest monetary policy decision it signaled that there may be three more cuts this year. The consensus among economic analysts is that there will be between two and four cuts this year and the majority of the major banks believe that the first will take place as early as August. The cut in the policy rate is a relief for both households and companies, which have been squeezed by the high interest rate levels. 

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What does it mean for entrepreneurs?

The fact that inflation is falling, bankruptcies are decreasing and the key interest rate is being lowered is positive for the whole of society. As an entrepreneur, it also means that you can hopefully start to breathe out after the tough period that has been. When the policy rate falls, purchasing power in society increases and as an entrepreneur you can expect sales to pick up again. The cuts will also have an impact at several levels. As interest rates are lowered, your suppliers' costs will fall, which is likely to have a positive impact on your purchase prices.

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In the long run, cuts in the key policy rate will also reduce the cost of financing for businesses, which has a certain lag effect compared to variable-rate mortgages. The cost of investing in your business will therefore fall too. All in all, this summer's positive news means that you, as an entrepreneur, can start to look more hopefully to the future and enter the fall with optimism.