Sweden Inflation

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Sweden: Annual consumer prices fall for third consecutive month, putting pressure on Central Bank to stimulate inflation further

September 10, 2015

In August, consumer prices fell 0.2% over the previous month. The result was down from the flat reading recorded in July and also overshot market expectations of a 0.1% decrease. According to Statistics Sweden (SCB), higher prices for food and clothing were more than offset by a decrease in prices for airline travel expenditures and fuels.

Consumer prices fell 0.2% in August over the same month last year, which marked a deterioration compared to the 0.1% decrease observed in July. The fall in consumer prices in August marked the third month of price decreases and will put pressure on the central bank to bolster its attempts at stoking inflationary pressure. The Central Bank has been combatting falling prices with unconventional policy measures, including negative policy rates and a government bond-buying program. Annual average variation in consumer prices held at minus 0.1% in August for the sixth straight month.

Meanwhile, annual core inflation—defined as the CPI with mortgage rates held constant—increased 0.8% in August, which was slightly down from the 0.9% increase tallied in July.

The Central Bank expects inflation to average 0.2% in 2015 and sees it picking up to 2.0% in 2016. FocusEconomics Consensus Forecast panelists expect inflation to average 0.2% in 2015, which is down 0.1 percentage points from last month’s forecast. For 2016, the panel sees average inflation at 1.5%.


Author:, Economist

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Sweden Inflation Chart


Sweden Inflation August 2015

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


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