People shelter from the rain under their umbrellas as they walk past a partly damaged sticker of the Swedish healthcare services on a pavement to instruct people to follow the 2 meters rule on October 22, 2020, during the novel coronavirus COVID-19 pandemic. (File photo: AFP)

Stockholm （People's Daily）- Sweden’s National Institute of Economic Research has predicted that inflation will peak in 2022 at 5.2 percent before falling back to 2.8 percent after the Riksbank, Sweden’s central bank, hikes rates as early as September.

According to the institute’s March report, the Ukraine crisis has significant consequences to economic development in Europe. Sharp rises in commodity prices create further upward pressure on the already high inflation in many countries, including Sweden.

Both the ECB and the Riksbank are expected to bring forward their interest rate hikes to September this year. At the same time, Sweden’s GDP growth is being maintained, partly due to a sharp increase in public consumption.

"The Riksbank will probably increase the base interest rate for the first time since December 2019 this September, upping it to one percent until 2024, with further rate hikes likely between 2024 and 2026, " said the report.