Sweden: CPI and CPIF inflation decline in November
December 12, 2018
Consumer prices in Sweden declined 0.1% month-on-month in November, matching October’s figure, according to data released by Statistics Sweden (SCB). November’s price fall was driven by lower prices for transport, health and communication.
The CPI with interest rates held constant (CPIF) fell from 2.4% in October to 2.1% in November, within the Central Bank’s 1.0%–3.0% tolerance band but undershooting market expectations, while core CPIF inflation—which excludes volatile energy costs—dipped from 1.5% in October to 1.4%. CPI inflation also dropped, from 2.3% to 2.0%.
According to Jonas Goltermann, Developed Markets Economist at ING: “Today’s downside surprise reduces the probability that the Riksbank will raise interest rates at its policy meeting next week. Our view remains that weak inflation data over the autumn combined with the very poor Q3 GDP reading and the increasingly uncertain international environment will be enough to push the ever-cautious Riksbank majority led by Governor Ingves to postpone the rate hike into February.”
Sweden Inflation Forecast
FocusEconomics Consensus Forecast panelists expect CPI inflation to average 2.0% in 2019 and 2.1% in 2020, and CPIF inflation to average 2.2% in both 2019 and 2020.
Author: Oliver Reynolds, Economist