Sweden: Inflation moderates in January
February 17, 2017
Consumer prices dropped 0.7% in January, contrasting the 0.5% increase observed in December. The print, which marked the sharpest drop in two years, met market analysts’ expectations. According to Statistics Sweden (SCB), CPI normally falls in January as a result of seasonal fluctuations in prices. Clothing and footwear, international flights and package holidays were among the components that experienced the largest drops.
Inflation edged down from December’s almost five-year high of 1.7% to 1.4% in January. The print came below the 1.5% increase markets had expected and marked the first moderation in inflation since September. The drop came as a blow to the Central Bank’s effort to prop up prices in the country as inflation now stands further away from the Bank’s 2.0% target. The recent rally in the krona, which made imported goods cheaper, is chiefly to blame for January’s drop. Meanwhile, annual average inflation remained steady in January at the 1.0% print observed in December.
Lastly, core inflation—defined as the CPI with mortgage rates held constant—was 1.6% in January, down from December’s 1.9%.