Sweden Inflation February 2017

Sweden

Sweden: Inflation hits five-year high in February

March 14, 2017

Consumer prices rose 0.7% in February, contrasting the 0.7% drop observed in January. According to Statistics Sweden (SCB), the rise was mainly driven by higher prices for clothing as well as for package holidays and vegetables.

Inflation came in at 1.8% in February (January: +1.4% month-on-month), which marked the highest value in five years and a further step towards the Central Bank’s 2.0% target. February’s spike in inflation, coupled with a stronger economy, could allow the Riksbank to raise interest rates in the near future. Meanwhile, annual average inflation edged up from 1.0% in January to 1.2% in February.

Lastly, core inflation—defined as the CPI with mortgage rates held constant—was 1.2% in February, up from January’s 1.0%.

In its February Monetary Policy Report, the Central Bank projects that inflation will average 1.6% in 2017 and sees it picking up to 2.1% in 2018. FocusEconomics Consensus Forecast panelists expect inflation to average 1.6% in 2017, which is up 0.1 percentage points from last month’s forecast. For 2018, the panel sees average inflation at 1.9%.


Author: Jean-Philippe Pourcelot, Economist

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Sweden Inflation Chart


Sweden Inflation February 2017

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


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