Sweden Inflation July 2016


Sweden: Inflation reaches an over-four-year high in July

August 11, 2016

In July, consumer prices rose 0.1% over the previous month. The print was in line with June’s result and contrasted market expectation of a 0.2% decline in prices. According to Statistics Sweden (SCB), higher prices for food and international flights drove the monthly increase. The rise was, nonetheless, dampened by a drop in prices for clothing and fuel.

Inflation in July was 1.1%, which was up from the 1.0% recorded in June. July’s result represented the highest rate since April 2012. While Sweden’s inflation is still below the Central Bank’s 2.0% target, July’s reading suggests that it is moving towards the target. The Central Bank’s unconventional policy measures that include negative policy rates and a government bond-buying program are expected to continue during the second half of 2016 in order to push inflation up. Annual average inflation was 0.5% in July, up from 0.4% in June.

Meanwhile, core inflation—defined as the CPI with mortgage rates held constant—was 1.4% in July, which came in slightly below the 1.5% registered in June.

The Central Bank projects inflation to average 1.5% in 2016 and sees it picking up to 1.8% in 2017. FocusEconomics Consensus Forecast panelists expect inflation to average 0.9% in 2016, which is unchanged from last month’s forecast. For 2017, the panel sees average inflation at 1.6%.

Author:, Economist

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Sweden Inflation Chart

Sweden Inflation July 2016 0

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

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