We believe that it will have quite a significant impact, even if it's not 100 percent, says SEB's interest and currency strategist Amanda Sundström.
It may be that the food retailers take the opportunity to raise prices and that the final result does not mean that consumers actually get the entire reduction. It depends very much on the competitive situation and demand, she adds.
Expected to push down inflation
But the already hard pressure on the industry – politically, in the media and from various consumer boycotts – means that the scope for taking the opportunity to raise prices when the food tax is reduced is small, according to Sundström.
There is not enough goodwill in the industry to get through that the food retailers swallow the tax reduction. If you were to raise prices despite the tax reduction, you would not get such good publicity, she says.
A food price reduction of just over 5 percent would in turn push down inflation by 0.8 percentage points, according to Amanda Sundström. But since the measure is expected to be temporary – and only apply for one year and nine months – the inflation effect is not expected to have a significant impact on the Swedish Central Bank's monetary policy. Possibly, it could make the Swedish Central Bank "more willing" to lower the interest rate, according to Sundström.
Can stimulate consumption
Reduced food tax – and thus lower food prices – would likely also be able to stimulate more consumption in general, according to SEB's economists, as consumer confidence is usually affected by food prices.
SEB's analysis – which is based on the tax on all food being reduced – has been made since SVT on Monday reported that the government and the Sweden Democrats have agreed to halve the food tax from 12 to 6 percent during the period April 1, 2026 - December 31, 2027.
The proposal is expected to be included in the new initiatives totaling 80 billion kronor that the government has flagged in the budget bill for 2026, the so-called autumn budget.
SEB's calculation of the effects is based, among other things, on what happened when the food tax was reduced in 1996 from 21 to 12 percent, which in the first year led to food prices (including tax) falling by 7.4 percent.
