Sweden Inflation July 2017


Sweden: Inflation rises in July - highest in over 5 years

August 15, 2017

Consumer prices increased 0.5% in July, coming in above the previous month’s 0.1% rise and marking the highest reading in three months. The result overshot market expectations of a 0.2% increase in consumer prices. Statistics Sweden (SCB) reported that the result came on the heels of higher prices for package holidays, international flights, electricity and food.

Inflation in July climbed to 2.2%, its highest level in over five-and-a-half years (June: +1.7%). The print was slightly above the expectations of market analysts. While inflation data from recent months suggested that the inflation rate was stabilizing slightly below the Central Bank’s target of 2.0%, July’s print came in above the target. Even though inflation came in above the target, it is likely too early to expect changes to the Central Bank’s monetary stance, although investors will be hopeful that the result will accelerate a normalization of monetary policy.

Core inflation, which is defined as the CPI with mortgage rates held constant, increased as well and came in at 2.4% (June: +1.9%)—the highest reading in over seven years.

In its July Monetary Policy Report, the Central Bank projects that inflation will average 1.6% in 2017 and sees it picking up to 2.0% in 2018. FocusEconomics Consensus Forecast panelists expect inflation to average 1.7% in 2017, which is unchanged from last month’s forecast. For 2018, the panel also sees average inflation at 1.7%.

Author:, Economist

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Sweden Inflation Chart

Sweden Inflation July 2017

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

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