STOCKHOLM, April 25 - Sweden's central bank left interest rates unchanged on Friday, as expected, and reiterated its forecast that Swedish inflation would exceed its two percent target this year but fall short of it in 2004. "It is anticipated that inflation will exceed the inflation target in 2003 and fall short of the target in 2004," the Riksbank said in a statement accompanying its executive board's decision to leave the key repo rate at 3.50 percent. "A continued recovery in the Swedish economy is also judged at present to be the most likely scenario," the Riksbank said.
"However, slightly weaker growth in export markets and the sluggish growth in investment seen at the end of last year suggest that the economic recovery will be somewhat slower compared with the assumptions of the March Inflation Report," it said. In the March report, the bank forecast Swedish gross domestic product (GDP) growth of 1.7 percent this year and 2.4 percent in 2004.//