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Sweden Inflation January 2024

Sweden: CPIF accelerates in January

Consumer price inflation with a fixed interest rate (CPIF) came in at 3.3% in January, which was up from December’s 2.3%. January’s reading was the highest inflation rate since November 2023. Looking at the details of the release, the increase was driven by faster housing and utilities price growth, which more than offset moderating price pressures for transportation and food and non-alcoholic beverages. Moreover, prices for recreation and culture grew at a more subdued pace.

Still, the trend pointed down, with annual average inflation falling to 5.5% in January (December: 6.0%). Meanwhile, consumer price inflation rose to 5.4% in January from the previous month’s 4.4%.

Finally, consumer prices with a fixed interest rate dropped 0.33% over the previous month in January, contrasting the 0.63% increase seen in December. January’s result marked the sharpest fall in prices in a year.

Despite the headline CPIF reading in January, core inflation receded to a 22-month low of 4.4% (December: 5.3%). The notable moderation upped hopes that the Riksbank would soon kick off its loosening cycle, providing the restrained economy with some long-awaited relief. Still, the outlook remains unclear as a weak krona and ongoing geopolitical uncertainty could drive up inflation once again.

Our Consensus sees headline CPIF returning to the Riksbank’s 2.0% target by Q4 2024, thanks to a high base of comparison and the success of the Riksbank’s aggressive monetary policy. Average CPIF this year should roughly be a third of 2023’s level.

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