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Consumer prices keep dropping in Sweden

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11:52 CEST+02:00
Sweden's inflation rate continued to fall in July as consumer prices dropped for the fourth straight month, according to new figures from Statistics Sweden.

Swedish prices fell by 0.9 percent in July on a 12-month basis, after dropping by 0.6 percent in June.

July represents the fourth month running in which prices have fallen after falls of 0.4 percent in May and 0.1 percent in April.

Statistics Sweden said the fall in the price of petrol, lower interest rates for housing and cheaper clothes were the key drivers behind the month's deflation.

It also said that from June to July, consumer prices fell by 0.5 percent.

Sweden experienced several months of strong inflation last year before tailing off rapidly.

In September, inflation was as high as 4.4 percent on a 12-month comparison.

Sweden's central bank has set itself an inflation target of 2.0 percent year-on-year.

Deflation can hamper economic growth because it reduces businesses profits and discourages investment.

It also leads consumers to put off buying goods in the hope that prices will continue to fall.

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