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.
Author: Robert Hill, Economist