Saturday, 10 June, 2023

Swedish inflation slows on lower food prices

Swedish inflation slows on lower food prices

STOCKHOLM: Sweden's inflation slowed more than expected in April as food prices dropped for the first time since 2021, official data showed Monday, possibly giving the central bank room to pause its rate-hike campaign.

Consumer prices rose by 10.5 percent last month, compared to 10.6 percent in March, reports AFP.

"Food prices fell for the first time since November 2021, which contributed to an easing of the inflation rate in April," Caroline Neander, statistician at Statistics Sweden, said in a statement, reports AFP.

The statistics agency also noted that fuel prices had fallen seven percent over the past year.

Inflation peaked in December at 12.3 percent -- a more than 30-year high -- then slowed down slightly in January to 11.7 percent, but unexpectedly spiked back to 12 percent in February.

Like its peers in the United States and Europe, Sweden's central bank has repeatedly hiked its guiding rate in an effort to rein in inflation.

Riksbank raised the rate to 3.5 percent in late April and said it would "probably" raise it by another quarter-point in June or September.

Sweden's inflation adjusted for fixed interest rates (CPIF) -- the figure used by the Riksbank to guide monetary policy -- was 7.6 percent in April, compared to 8.0 percent in March.

According to analysts queried by news agency TT, the drop was more than expected, which could lead the Riksbank to hold off raising the rate further in June.

For 2023 as a whole, the central bank expects the Swedish economy to contract 0.7 percent, and has forecasted unadjusted inflation of 8.9 percent and rising unemployment.