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Sweden Inflation February 2024

Sweden: CPIF moderates in February

Consumer price inflation with a fixed interest rate (CPIF) came in at 2.5% in February, which was down from January’s 3.3%. Looking at the details of the release, prices for housing, water, electricity, gas and other fuels grew at a slower rate in February. Moreover, prices for food and non-alcoholic beverages rose at a softer pace, outweighing a stronger increase in prices for transportation.

Accordingly, the trend pointed down, with annual average inflation falling to 4.9% in February (January: 5.5%). Meanwhile, consumer price inflation fell to 4.5% in February from January’s 5.4%.

Lastly, consumer prices with a fixed interest rate rose 0.20% from the previous month in February, swinging from January’s 0.33% drop.

Similarly to headline CPIF, core inflation receded more than markets and the Riksbank had anticipated to a two-year low of 3.5% in February (January: 4.4%).

February’s core inflation result has investors closely monitoring if the moderation is enough to push the Riksbank to kick off its loosening cycle when it convenes next on 26 March. Uncertainty remains elevated due to a weak krona, although an interest rate cut would provide some relief for the strained economy.

Our Consensus is for average CPIF to gradually moderate through Q4 2024, when it should fall just below the official 2.0% target, owing to the Riksbank’s currently tight monetary policy stance.

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