Inflation according to the CPIF measure was halved to 0.8 percent in April, according to a preliminary calculation by Statistics Sweden (SCB).
That compares with 1.6 percent in March. Analysts had on average expected inflation to fall to 1.2 percent in April, according to Bloomberg.
The reduced food VAT is having an impact.
"In the preliminary calculations, we can see that food prices fell by 5.5 percent from March to April," says Sofie Öhman, price statistician at Statistics Sweden, in a press release.
“More purchasing power for salaries”
Compared to April last year, food prices have fallen by 5.7 percent, according to Statistics Sweden.
"This is incredibly valuable for households. Falling prices mean you get more purchasing power from the salary you receive," says Robert Bergqvist.
On the other hand, transportation costs are up, rising 5.2 percent. Prices for restaurants and hotels are also up, by 4.1 percent compared with April last year.
Excluding energy prices, CPIF inflation fell to zero percent in April, from 1.1 percent in March.
“Relief for the Swedish Central Bank”
The Swedish Central Bank's inflation target is CPIF inflation, where the effects of mortgage interest rates have been removed, of 2.0 percent.
Today's inflation figure gives the Swedish Central Bank "large degrees of freedom," says Bergqvist.
This is a huge relief for the Swedish Central Bank. When they now go into an interest rate meeting, they don't have to be worried that we have an inflation problem even before this energy crisis hits.
Even though the preliminary inflation figure is clearly lower than the Swedish Central Bank's target, Bergqvist is not worried.
If we stay at these levels for a long time, it could become a problem. But we are not there yet.
