Sweden: CPIF and CPI inflation spark into life in September
October 11, 2018
Consumer prices in Sweden rose 0.5% month-on-month in September according to data released by Statistics Sweden (SCB), contrasting August’s 0.2% decline. September’s price increase was driven by higher prices for food and non-alcoholic beverages; and clothing and footwear.
All measures of inflation were up notably in September. The CPI with interest rates held constant (CPIF) picked up to 2.5% in September from 2.2% in August, beating market expectations but still within the Central Bank’s 1.0%-3.0% tolerance band. CPI inflation reared up from 2.0% in August to 2.3% in September, while core CPIF inflation, which excludes volatile energy costs, was up from 1.2% in August to 1.6% in September. If higher inflation figures persist in the coming months—which is possible as the weaker krona feeds through to prices—this will increase the likelihood of a December rate hike.
Sweden Inflation Forecast
The Central Bank expects CPIF inflation to average 2.1% in both 2018 and 2019. FocusEconomics Consensus Forecast panelists expect CPI inflation to average 1.9% in 2018 and 2.1% in 2019, propped up by a robust economy and the weaker currency.
Author: Oliver Reynolds, Economist