Sweden: Consumer prices record sharpest drop in more than four years
April 10, 2014
In March, consumer prices were flat over the previous month, which was down from the 0.4% rise recorded in February. According to Statistics Sweden (SCB), the result reflected that higher prices for clothing were offset by lower prices for recreation and culture.
Consumer prices fell 0.6% over the same month last year, which marked the sharpest decline since November 2009. The figure followed the 0.2% fall tallied in February and exceeded market expectations of a 0.3% decline. As a result, inflation remains below the Central Bank's target of 2.0%. In addition, annual average inflation remained at February's minus 0.1% in March.
Meanwhile, annual core inflation, defined as the CPI with mortgage rates held constant, decreased from 0.4% in February to a flat reading in March.
The Central Bank expects inflation to average 0.6% in 2014 and 2.5% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 0.4% in 2014, which is down 0.4 percentage points from last month's forecast. For 2015, the panel sees average inflation at 1.8%.
Author: Carl Kelly, Economist