Sweden: CPIF inflation unchanged in August, CPI inflation dips
September 14, 2018
Consumer prices in Sweden declined 0.2% month-on-month in August according to data released by Statistics Sweden (SCB), contrasting July’s 0.5% rise. August’s price decline was driven by lower prices for transport; and recreation and culture.
The CPI with interest rates held constant (CPIF) was unchanged at 2.2% in August, slightly above the Riksbank’s 2.0% target but firmly within the 1.0%-3.0% tolerance band. CPI inflation dipped from 2.1% to 2.0%, while core CPIF inflation, which excludes volatile energy costs, dipped from 1.3% to 1.2%. Coupled with the recent downward revision to GDP growth, subdued core inflation could encourage the Riksbank to wait until February to raise rates (the Central Bank’s current guidance suggests a rate hike in either December or February).
Author: Oliver Reynolds, Economist