Sweden: Inflation dips in April

Consumer prices in Sweden rose 0.4% on a month-on-month basis in April according to data released by Statistics Sweden (SCB), up from March’s 0.3% increase. The SCB’s data showed that April’s price rise was driven by higher prices for food and non-alcoholic beverages, transport and recreation and culture.

Inflation decreased from 1.9% in March to 1.7% in April. As a result, inflation moved further below the Riksbank’s 2.0% target, but was still firmly within the 1.0%-3.0% tolerance band. Meanwhile, annual average inflation came in at 1.8% for the seventh consecutive month. The CPI with interest rates held constant (CPIF) was 1.9% in April, down from 2.0% in March.

Sweden Inflation Forecast

The Central Bank expects inflation to average 1.8% in 2018 and 2.6% in 2019. FocusEconomics Consensus Forecast panelists expect inflation to average 1.8% in 2018 and 2.0% in 2019, propped up by a robust economy and highly accommodative monetary policy—at its most recent meeting, the Riksbank signaled it won’t begin to raise rates until near the end of this year. However, the expected appreciation of the krona over the next few years will keep a lid on price increases.