Sweden: Inflation moderates in February
March 15, 2016
In February, consumer prices rose 0.3% over the previous month. The result contrasted the 0.3% decrease recorded in January and was in line with market expectations. According to Statistics Sweden (SCB), the largest increases were for the clothing and packaged holidays components, while clothing and electricity prices saw the largest decrease.
Inflation in February was 0.4%, down from 0.8% in January. Although inflation eased in February, the reading marked the seventh consecutive increase in annual consumer prices since May. This will take some pressure off the Central Bank, which has been struggling to bring inflation in line with its 2.0% target. To this end, the Bank has employed unconventional policy measures, including negative policy rates and a government bond-buying program, since the beginning of 2015. Annual average variation in consumer prices was stable in February at January’s 0.1% increase.
Meanwhile, core inflation—defined as the CPI with mortgage rates held constant—was 1.1% in February, which was down from the 1.6% increase tallied in January.
Author: Robert Hill, Economist