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Sweden Inflation February 2022

Sweden: Inflation hits highest level in over 28 years in February

Consumer prices with a fixed interest rate increased 0.85% in February over the previous month, swinging from the 0.55% fall seen in January. The rebound was broad-based, with greater price pressures recorded for housing, water, electricity, gas and other fuels, transportation, and food and non-alcoholic beverages.

CPIF inflation in annual terms increased to 4.5% in February, following January’s 3.9%. February’s result represented the highest inflation rate since December 1993. Meanwhile, the trend pointed up slightly, with annual average inflation coming in at 2.8% in February (January: 2.6%).

Regarding the outlook, Knut Hallberg, senior economist at Swedbank, commented:

“Risks to the near-term forecast are mostly energy, but also core related. A renewed increase in prices on oil and natural gas could push inflation higher. On the downside, we do expect the government to propose energy support to households which could impact CPIF. This is less likely to affect March CPIF, but April should reasonably be in play. […] On the back of current price pressures, we now expect the Riksbank to hike the repo rate already in September this year (previously November), followed by another hike in February 2023.”

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