Sweden: Inflation rises again in June, CPIF inflation stays within the Bank's target band

Consumer prices in Sweden rose 0.2% on a month-on-month basis in June according to data released by Statistics Sweden (SCB), matching May’s figure. The SCB’s data showed that June’s price rise was driven by higher prices for housing, water, electricity, gas and other fuels; transport; and recreation and culture.

The CPI with interest rates held constant (CPIF) rose to 2.2% in June from 2.1% in May, a smidgeon above the Riksbank’s 2.0% target but firmly within the 1.0%-3.0% tolerance band. Inflation increased from 1.9% in May to 2.1% in June, while annual average inflation ticked up from 1.8% to 1.9%.

Sweden Inflation Forecast

The Central Bank expects CPIF inflation to average 2.1% in both 2018 and 2019. FocusEconomics Consensus Forecast panelists expect CPI inflation to average 1.8% in 2018 and 2.0% in 2019, propped up by a robust economy, solid wage growth and highly accommodative monetary policy. In addition, the substantial weakening of the krona since the beginning of the year, coupled with higher oil prices, will add further upward pressure to prices.