Sweden Inflation September 2016


Inflation edges down in September

In September, consumer prices inched up 0.2% from the previous month, contrasting August’s 0.1% drop and falling short of market expectations of a 0.5% increase. Higher prices for clothing drove the monthly increase, which was nevertheless softened by a drop in prices for vegetables and telephone services, according to Statistics Sweden (SCB).

Inflation edged down from August’s 1.1% to 0.9% in September, which marked the lowest value in four months and remained below the Central Bank’s 2.0% target. The Central Bank is expected to go further with its unconventional policy measures, including negative policy rates and a government bond-buying program, during the remainder of 2016 in order to push up inflation. Annual average inflation inched up to 0.7% in September from 0.6% in August.

Meanwhile, core inflation—defined as the CPI with mortgage rates held constant—was 1.2% in September, down from August’s 1.4%.

The Central Bank projects that inflation will average 1.5% in 2016 and sees it picking up to 1.8% in 2017. FocusEconomics Consensus Forecast panelists expect inflation to average 1.0% in 2016, which is unchanged from last month’s forecast. For 2017, the panel sees average inflation at 1.6%.

Author:, Economist

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Sweden Inflation Chart

Sweden Inflation september 2016

Note: Year-on-year and month-on-month variation of consumer price index in %.
Source: Statistics Sweden (SCB).

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