Sweden Inflation August 2018


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).

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 2.0% in 2019, propped up by a robust economy, solid wage growth and highly accommodative monetary policy. In addition, the substantial weakening of the krona since the beginning of the year, coupled with higher oil prices, will add further upward pressure to prices.

Author:, Economist

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Sweden Inflation Chart

Sweden Inflation August 2018

Note: Year-on-year and month-on-month variation of consumer price index in %.
Source: Statistics Sweden (SCB).

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