Simon Johnson
STOCKHOLM (Reuters) – Swedish inflation was higher than expected in May, data showed on Friday, but analysts said they expected it to fall in coming months and the central bank to continue easing policy after cutting interest rates last month. .
Inflation, which peaked above 10% in late 2022, has slowed significantly in recent months and analysts said May’s data did not change the overall picture.
The Bureau of Statistics said consumer prices at fixed rates (CPIF) rose 0.2% from April and 2.3% from the same month last year.
Excluding volatile energy prices, an indicator that the Riksbank is currently paying particular attention to, inflation was 3.0% compared with the same period last year.
Analysts had previously forecast Sweden’s overall inflation rate in May at 2.1%, with inflation excluding energy at 2.7%.
Analysts blame some of the cost overruns on pop icon Taylor Swift’s three concerts in Stockholm and the Eurovision Song Contest final in Malmö in May.
Capital Europe economist Adrian Prettejohn said: “We continue to believe that CPIF inflation will fall below the Riksbank’s 2% target in the second half of the year, prompting policymakers to cut the policy rate from the current 3.75% to 3.00% by the end of the year. “Economics says.
Food, air travel and package holidays have pushed up inflation, according to the Bureau of Statistics.
Sweden’s Riksbank cut its key interest rate for the first time in eight years in May, saying the fight against inflation was almost complete. The company expects to make two more layoffs this year, possibly in the second half.
However, the European Central Bank and the Federal Reserve, which cut key interest rates last week, are cautious about their future plans to reduce borrowing costs, which may still affect the Riksbank.
The Riksbank’s latest forecast in March was for an overall inflation rate of 2.6% and an inflation rate excluding energy of 2.9%. In April, inflation data were 2.3% and 2.9% respectively.
The Riksbank will announce its next policy decision on June 27.
