Sweden: Inflation dips in December

Consumer prices in Sweden rose 0.4% in December on a month-on-month basis according to data released by Statistics Sweden (SCB). This was up from November’s 0.2% increase and in line with market expectations. The SCB’s data showed that the uptick was driven by higher prices for food and non-alcoholic beverages and transport.

Inflation came in at 1.7% in December, down from October’s 1.9% and slightly undershooting market expectations. As a result, inflation moved slightly further from 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%, matching November’s figure. The CPI with interest rates held constant (CPIF) was 1.9% in December, down from 2.0% in November.

Sweden Inflation Forecast

The Central Bank expects CPIF inflation to average 2.0% in both 2018 and 2019. FocusEconomics Consensus Forecast panelists expect inflation to average 1.9% in 2018 and 2.1% in 2019, propped up by highly accommodative monetary policy and a robust economy. However, the expected appreciation of the krona over the next few years will keep a lid on price increases.