Sweden: Consumer prices record largest drop in nearly a year
February 18, 2014
In January, consumer prices fell 1.2% over the previous month, which contrasted the 0.3% increase recorded in December. According to Statistics Sweden (SCB), the result came on the back of lower prices for clothing, footwear and transportation.
Consumer prices fell 0.2% over the same month last year, which contrasted the 0.1% increase recorded in December and marked the sharpest fall since May 2013. The figure undershot the flat reading that markets had expected. Annual inflation is still well below the Central Bank's target of 2.0%. In addition, annual average inflation remained at December's minus 0.1% in January.
Meanwhile, the core inflation index - defined as the CPI with mortgage rates held constant - fell from 0.8% in December to 0.4% in January.
The Central Bank expects inflation to average 0.6% in 2014 and 2.5% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 1.0% in 2014, which is down 0.2 percentage points from last month's forecast. For 2015, the panel sees average inflation at 2.0%.
Author: Dirina Mançellari, Senior Economist