Sweden: Consumer prices fall unexpectedly
November 12, 2013
In October, consumer prices fell 0.2% over the previous month, which contrasted the 0.4% increase recorded in September. According to Statistics Sweden (SCB), the result came on the back of lower prices of food as well as fuels.
Annual consumer prices fell after having increased for three straight months, declining 0.1% in October (September: 0.1% year-on-year). The figure contrasted the 0.2% increase the markets had expected. At the current level, inflation is well below the Central Bank's target of 2.0%. In addition, annual average inflation inched down from a flat reading in September to minus 0.1% in October.
Meanwhile, the core inflation index - defined as the CPI with mortgage rates held constant - fell 0.2% over the previous month in October, while annual core inflation fell to 0.6%.
According to its September Monetary Policy Report, the Central Bank expects inflation to average 0.1% in 2013 and 1.3% in 2014. FocusEconomics Consensus Forecast panelists expect inflation to average 0.3% in 2013, which is down 0.1 percentage points from last month's forecast. For 2014, the panel sees average inflation at 1.5%, which is unchanged over last month's estimate.
Author: Dirina Mançellari, Senior Economist