Sweden’s CPI inflation lowest since January 2022

Sweden’s annual consumer inflation has eased to 3.7% in May from 3.9% in April, the latest data by Statistics Sweden showed.

It has been the lowest inflation rate since January 2022.

In comparison, market consensus had pointed to a bigger slowdown to 3.5%.

In May, prices moderated for housing & utilities (7.5% YoY versus 8.6% YoY in April), recreation & culture (1.8% YoY versus 2.4% YoY in April) and restaurants & hotels (4.9% YoY versus 5.6% YoY in April).

Conversely, inflation accelerated for food & non-alcoholic beverages (1.5% YoY from 0.7% YoY in April) and for transport (2.4% YoY from 0.2% YoY in April).

In the meantime, Sweden’s consumer price index with a fixed interest rate (CPIF), went up 2.3% year-on-year in May, or at the same rate as in April.

“We remain confident that CPIF inflation will undershoot the Riksbank’s 2% target in the second half of the year, prompting policymakers to cut the policy rate from 3.75% currently to 3.00% by the year-end,” Adrian Prettejohn, European Economist at Capital Economics, was quoted as saying by Reuters.

The EUR/SEK currency pair settled 0.05% higher at 11.2325 on Friday. For the week, the exotic Forex pair retreated 1.25%, as it extended a string of four consecutive weekly losses.