Sweden: Inflation falls to negative territory for the first time in three years
December 13, 2012
In November, consumer prices fell 0.2% over the previous month, which followed the 0.1% decline recorded in October. According to Statistics Sweden (SCB), the reading was mainly influenced by lower interest costs for owner occupied housing as well as lower fuel prices.
Building on the monthly decline, consumer prices fell 0.1% over the same month the year before, which was a notch below market expectations of 0.0%. By entering into deflationary territory for the first time since November 2009, prices remain well below the Central Bank's (Riksbank) inflation target of 2.0%. In addition, annual average inflation edged down from 1.3% in October to 1.1% in November.
Meanwhile, the core inflation index - defined as the CPI with mortgage rates held constant - fell 0.2% over the previous month, driving annual core inflation down to 0.8% in November (October: +1.1%).