Inflation in July landed at 3.0 percent according to the KPIF measure, shows a preliminary calculation made by the Statistical Central Bureau (SCB). It was somewhat below the analysts' expectations, which on average were 3.1 percent. In June, the inflation rate was surprisingly high at 2.8 percent. The Swedish Central Bank's goal is an inflation rate of 2.0 percent.
Most recently, the KPIF inflation was this high in January 2024, when it was 3.3 percent.
Disappointment
Danske Bank's chief economist Susanne Spector says that the inflation figure makes it more difficult for the Swedish Central Bank to lower the interest rate and that it now seems excluded to lower it in August.
So a disappointment that the figures did not fall back after last month's surprisingly high outcome, but rather in line with expectations, she says and adds:
The Swedish Central Bank is in a difficult situation with a weaker economic development.
SEB's chief economist Jens Magnusson points out that inflation was slightly lower than expected, given the clear increase seen last month.
Thus, one can assume that the Swedish Central Bank will lower the interest rate in September. If the figure had landed higher today, it would have been more unlikely.
According to Jens Magnusson, however, we should not interpret the figure as if we are getting inflation under control.
The Swedish Central Bank is probably not blowing over the danger and inflation is still above the target. We also do not yet know how the new US tariffs will affect the economy, he says.
Cold shower for the Swedish Central Bank
Also, Länsförsäkringar's chief economist Alexandra Stråberg notes that it was slightly lower than expected, but points out that it is still high.
"The summer's inflation figures have been a bit of a cold shower for both the Swedish Central Bank and for Swedish households. This was the last thing the economy needed in its current state".
Inflation measured as KPI landed at 0.8 percent in annual terms. KPIF excluding energy landed at 3.1 percent.
KPIF inflation, which according to the Swedish Central Bank's inflation target should be 2.0 percent, is an underlying inflation measure where the effects of interest costs have been counted out.
Facts: What does KPI and KPIF mean?
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Inflation refers to the increase in consumer prices over a period compared to the price for the same goods and services during the same period a year earlier. Inflation is measured using the consumer price index (KPI), which is based on the pricing of a defined basket of goods and services.
The Swedish Central Bank uses another adjusted inflation measure for its inflation target of 2 percent. It is called KPIF and when it is calculated, the changes in households' mortgage interest rates are removed.
The underlying inflation or "core inflation" is described by other alternative inflation measures. In Sweden, the measure KPIF excluding energy is usually used, where in addition to mortgage interest effects, energy price changes are also removed. In other countries, food prices are also removed when talking about underlying inflation.
