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Sweden Inflation March 2024

Sweden: CPIF approaches three-year low in March

Consumer price inflation with a fixed interest rate (CPIF) inched down to 2.2% in March from February’s 2.5%. March’s figure represented the lowest inflation rate since July 2021. Looking at the details of the release, price pressures cooled largely on the back of softer growth in prices for housing, water, electricity, gas and other fuels. In addition, prices for food and non-alcoholic beverages dropped year on year after growing in the previous month.

Accordingly, the trend pointed down, with annual average inflation falling to 4.4% in March (February: 4.9%). Meanwhile, consumer price inflation receded to 4.1% in March from February’s 4.5%.

Finally, consumer prices with a fixed interest rate increased 0.09% from the previous month in March, after February’s 0.20% rise.

Similarly, core inflation waned to 2.9% in March from February’s 3.5%. March’s print was the softest inflation rate since January 2022 and undershot the expectations of both the Riksbank and the market.

Our Consensus sees average CPIF falling below the Riksbank’s 2.0% target in Q4 2024.

March’s moderation in core inflation has markets closely watching the Riksbank’s response: The Bank hinted that it could deliver the first interest rate cut when it convenes next on 7 May or at the following meeting in June. Despite a more favorable inflationary environment, uncertainty remains amid a weak krona.

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