Sweden Inflation Eases More Than Expected as Riksbank Nears Peak
(Bloomberg) — Sweden’s core inflation rate declined more than expected in August, providing some relief to the country’s central bank as it prepares to unveil its next move in the battle to rein in price increases.
A release from Statistics Sweden that offers a key data point to the Riksbank ahead of its rate-setting meeting next week showed that prices excluding energy and interest-rate changes rose by 7.2% from a year earlier. That was lower than the 7.4% expected by economists in a Bloomberg survey.
The central bank is widely projected to raise its benchmark rate by a quarter of a percentage point, to 4%, as its efforts to curb inflation have been hampered by a weak krona that is making imported goods more expensive. The increased borrowing costs are set to weigh on an economy that is seen shrinking this year, and make financing more costly for the country’s heavily indebted landlords.
In August, the CPIF inflation rate that the Riksbank targets fell to 4.7% from 6.4% in the previous month as electricity was clearly less expensive than a year ago. The central bank expects CPIF to slow throughout this year and to stabilize near its 2% target by mid-2024.
“Food prices and electricity prices fell in August,” Caroline Neander, statistician at Statistics Sweden, said in a statement. “Prices for package holidays also decreased, which is normal for the season.”
—With assistance from Joel Rinneby.
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