Swedish c.bank's Ingves says normal economy in 2016/17, but rates lower than historically

STOCKHOLM, Sept 4 Thu Sep 4, 2014 5:31am EDT

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STOCKHOLM, Sept 4 (Reuters) - Sweden's economy will face an unusual situation in 2016 and 2017 with inflation around the Riksbank's 2 percent target and normal growth combined with a rate level lower than seen historically, central bank governor Stefan Ingves said on Thursday.

"As far as I know, it is a combination of normality and a rate level ... we haven't had before," Ingves told reporters.

However, he said that the Riksbank's assumption of a neutral rate level remained at around 4 percent.

Earlier in the day, Sweden's central bank kept its key interest rate unchanged at 0.25 percent as expected and stuck with its previous forecast that it would start to tighten policy at the end of next year. (Reporting by Stockholm Newsroom, editing by Mia Shanley)

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