Sweden: CPIF inflation rises in July
Consumer prices with a fixed interest rate (CPIF) inflation came in at 1.7% in July, which was up from June’s 1.3%. Looking at the details of the release, the acceleration was broad-based, with greater price pressures recorded for housing and utilities, and transportation.
Still, the trend pointed down, with annual average inflation coming in at 2.8% in July (June: 3.2%). Meanwhile, core consumer prices—which exclude energy costs as well as the effect of interest-rate changes—rose 2.2% in July, below June’s 2.3% increase. Markets had anticipated a more pronounced deceleration. Consumer price inflation was stable, coming in at June’s 2.6% in July.
Lastly, consumer prices with a fixed interest rate rose 0.15% from the previous month in July, contrasting June’s 0.02% fall.
Our panelists anticipate CPIF inflation to accelerate further from current levels through December, although it is still seen averaging slightly below H1 in H2. Looking further ahead, our Consensus is for average CPIF inflation to fall to the Riksbank’s 2.0% target in Q2 2025 and dip below it thereafter.
Overall in 2024, price pressures will hover around target as a higher unemployment rate and still-elevated interest rates limit demand-driven inflation. In addition, a stronger krona will dampen import prices. That said, wage growth is expected to outpace inflation and home prices will rebound. This will boost purchasing power and household wealth, respectively, and, in turn, limit the slowdown in CPIF inflation.