Sweden’s inflation rate rises to highest level in 28 years

Higher energy prices are fuelling rising inflation in Sweden.

Sweden's inflation rate rises to highest level in 28 years
Sweden's inflation rate has not been this high since 1993. Photo: Fredrik Sandberg/TT

Sweden’s inflation rate rose to 3.6 percent in November, up from 3.1 percent in October.

This was higher than expected, and was largely driven by an increase in electricity and fuel prices, according to a fresh report by Sweden’s national number crunchers Statistics Sweden. It was also the highest inflation rate in almost three decades.

“Rising energy prices contributed to the highest inflation rate since December 1993,” said Mikael Nordin, a statistician at Statistics Sweden, in a statement on Tuesday.

The 3.6 percent inflation rate is measured according to CPIF (Consumer Price Index with fixed interest),which subtracts the effects from changes to mortgage rates from the standard CPI. It’s a key metric used by Sweden’s Central Bank for its inflation target.

Before this, Sweden has long had a relatively low rate of inflation, and the Central Bank introduced negative interest rates in 2015 to bring it up to its target of two percent.

Statistics Sweden noted that prices also rose last month on package holidays, food, non-alcoholic beverages, restaurant and hotel services and miscellaneous goods and services. The CPIF inflation rate excluding energy rose from 1.8 to 1.9 percent in November.

The price of clothes also rose in November, but that could be linked to the usual seasonal changes.

Mobile phone, audio-visual and photo equipment prices fell last month, somewhat offsetting the rise in other consumer goods.


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Sweden facing ‘the highest inflation in 30 years’

Sweden last month saw the highest levels of inflation in more than 30 years, according to the latest figures from Statistics Sweden.

Sweden facing 'the highest inflation in 30 years'

Consumer prices rose 6.4 percent in April, the agency reported in its latest monthly figures, well ahead of the 6.1 percent rise predicted by analysts and up from 6.1 percent in March. 

“This shows high inflationary pressure. It’s in line with consensus, but it’s 0.2 percentage points higher than what the Riksbank has been predicting,” said Olle Holmgren, an economist with SEB. 

Rising prices of meat, vegetables and other groceries were the main reasons for the rise, with the prices of electricity and fuel falling month-on-month. If energy prices are excluded, inflation was 4.5 percent in April, up from 4.1 percent in March. 

“Restaurant prices are rise quite a bit for the second month in a row. That can be linked to grocery prices,” Holmgren said. “Then there are higher prices generally, but grocery prices are increasing rapidly.”

Holmgren predicted that the inflation rate could continue to rise in the coming months, increasing the risk that Sweden’s public bank, the Riksbank, will hike interest by 0.5 percentage points — two slots — in September. 

Fuel prices fell in April compared to March, although diesel remains 56.7 percent higher than a year ago and petrol 36 percent higher. 

The price coffee is higher now than at any time since it joined the consumer price index in 1983, after rising 29 percent so far this year. 

Other groceries which have risen significantly in price this year are cabbage and tomatoes, which rose in price by 43 percent ad 33 percent respectively. 

The price of avocado has fallen by 14 percent this year, while pickled herring has fallen in price by 16 percent.