Sweden Inflation

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Sweden: Annual consumer prices fall relatively less in July, providing some relief to embattled Central Bank

August 13, 2015

In July, consumer prices were unchanged over the previous month. The result was up from the 0.3% decrease recorded in June and also overshot market expectations of a 0.3% decrease. According to Statistics Sweden (SCB), lower prices for clothing and electricity were offset by higher prices for food and international flights.

Consumer prices fell 0.1% in July over the same month last year, which marked an improvement compared to the nine-month low 0.4% decrease tallied in June. The fall in consumer prices in June marked a return to negative territory and put pressure on the Central Bank, which has been combatting falling prices with unconventional policy measures, including negative policy rates and a government bond-buying program. The relatively better result in July lessens the need for the Central Bank to make further moves in its September meeting. Annual average variation in consumer prices held at minus 0.1% in July for the fifth straight month.

Meanwhile, annual core inflation—defined as the CPI with mortgage rates held constant—increased 0.9% in July, which was up from the 0.6% increase tallied in June.

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 July 2015

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


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