Sweden: CPIF inflation holds steady, slightly above target in April
Latest reading: Consumer prices with a fixed interest rate (CPIF) inflation was unchanged at March’s 2.3% in April. The reading was in line with the Riksbank’s expectations and undershot those of the market, though it remained above the Bank’s 2.0% target for the fourth month running. Looking at the details of the release, a sharper decline in housing prices largely offset a faster increase in food costs and a softer fall in those for transport.
As a result, the trend was unchanged, with annual average inflation coming in at March’s 1.9% in April. Core inflation—which excludes energy costs as well as the effect of interest-rate changes—inched up to 3.1% in April from March’s 3.0%, marking a 14-month high but surprising the Riksbank and market analysts on the downside. Meanwhile, consumer price inflation eased to 0.3% in April from March’s 0.5%.
Finally, consumer prices with a fixed interest rate rose 0.23% from the previous month in April, swinging from the 0.49% decline seen in March.
Panelist insight: Nordea’s Torbjörn Isaksson commented:
“The main conclusion is that food prices are levelling out and that price pressures for other goods seem to have eased after the rise around the turn of the year, perhaps helped by the stronger SEK. This can be of some relief for the Riksbank, as the upturn in inflation is not broadening. Services inflation is slightly higher than expected, but the deviation is small.”