Swedbank's head of forecasting Andreas Wallström expects inflation, according to the Swedish Central Bank's CPIF measure, to rise to 2.2 percent in March, up from 1.7 percent in February.
It is driven by rising energy prices, especially fuel prices, but air fares have also risen slightly, he says.
Excluding the currently skyrocketing energy prices, the annual rate of price increase would be 1.4 percent, Wallström believes. So it's not a crisis yet.
Disagree
Danske Bank's chief economist Susanne Spector makes roughly the same assessment, but not when it comes to the implications.
While Swedbank economists assess that inflation will remain below the Swedish Central Bank's inflation target in 2026 and that there will therefore be no rate hike this year, their colleagues at Danske Bank believe in a different scenario.
Susanne Spector believes rising energy prices for oil and gas are having spillover effects on, among other things, plastics and helium (an important component in the manufacture of semiconductors), and are negatively affecting supply chains.
Three rate hikes
In this environment, the krona comes under pressure. And a weakening of the krona at the same time as global prices rise strengthens the inflationary impulses in the Swedish economy, she says.
So we now expect the Swedish Central Bank to raise interest rates three times this year.
But uncertainty is particularly high. Andreas Wallström also believes that the Swedish Central Bank may raise rates.
The risk is that there will be some increase this year, he says.
In the fixed income market, traders expect 2–3 increases this year.
But the halved food VAT is doing its part to hold back general inflation. This means that food prices are expected to fall by around 5 percent in April.
But after that they will rise faster than the trend, says Andreas Wallström, justifying this by saying that rising energy prices will also have an impact on the food industry.
