Sweden Inflation August 2016

Sweden

Sweden: Inflation remains stable in August

September 13, 2016

In August, consumer prices inched down 0.1% over the previous month, contrasting both July’s 0.1% increase and market expectations of a flat reading. Lower prices for international flights drove the monthly decrease, which was nevertheless softened by an increase in prices for clothing and footwear, according to Statistics Sweden (SCB).

Inflation in August remained stable at July’s 1.1%, which had represented the highest rate since April 2012, but remains below the Central Bank’s 2.0% target. The Central Bank is expected to continue its unconventional policy measures, including negative policy rates and a government bond-buying program, during the remainder of 2016 in order to push up inflation. Annual average inflation inched up to 0.6% in August, up from 0.5% in July.

Meanwhile, core inflation—defined as the CPI with mortgage rates held constant—was 1.4% in August, in line with July’s result.

The Central Bank projects that inflation will average 1.5% in 2016 and sees it picking up to 1.8% in 2017. FocusEconomics Consensus Forecast panelists expect inflation to average 1.0% 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 August 2016

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


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