Stronger Swedish krona - but Equally Expensive Holidays

The krona has strengthened against the euro over the past year. But it does not help Swedes who dream of a cheaper holiday. Purchasing power in Europe is essentially unchanged compared to last summer, says Johan Javeus, chief strategist at SEB.

» Updated:

» Published:

Stronger Swedish krona - but Equally Expensive Holidays
Photo: Henrik Montgomery/TT

Share this article

The krona has strengthened against the euro over the past year. But it does not help Swedes who dream of a cheaper holiday.

Purchasing power in Europe is essentially unchanged compared to last summer, says Johan Javeus, chief strategist at SEB.

The Swedish krona has successively weakened against the euro since 2013. Last summer, the exchange rate reached a low point and has since recovered, particularly since the beginning of May.

But someone who only looks at the exchange rate risks deceiving themselves.

Compared to a year ago, the krona has strengthened by around three per cent in relation to the euro, but at the same time, prices in most European countries have risen by approximately the same amount, says Johan Javeus.

The two effects together result in almost unchanged purchasing power.

In most countries with the euro, inflation is around three per cent. If you look at Portugal, inflation has been around four per cent. In Italy, it has been one per cent.

But it is difficult to compare countries and plan your holiday based on inflation, emphasizes Johan Javeus.

You're measuring the price of goods in an entire country. Goods that residents buy may not have gone up as much as the goods that tourists normally buy. Generally, Swedes' purchasing power in Europe has not changed.

Those who want to plan their holiday based on purchasing power should instead look east.

In several Asian countries, we have seen currency strengthening. Our currency is strengthening in Indonesia, Thailand, Japan, and Vietnam. In countries like Egypt and Turkey, the krona has also strengthened. But here, inflation is so high that the effects cancel each other out.

Those who want a cheaper holiday can instead review the withdrawal fee at foreign ATMs, currency exchange fees, and other fees that banks charge.

There is no bank card that is best at everything, but if you look at your needs, you can choose the one that suits you best, says Fredrik Nordquist at the Consumers' Bank and Finance Bureau.

Another tip is to check whether it pays to pay with euros or Swedish kronor when making card purchases.

The consumer is faced with a difficult situation. You can either choose a fixed rate in Swedish kronor or a euro rate where you don't know what you'll pay until the day after.

What is best varies, but every time I've checked, it has paid to pay in euros.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

Fed Board Member Lisa Cook Retains Position After Court Ruling

Fed Board Member Lisa Cook Retains Position After Court Ruling

Tesla Stock Surges 3.6 Percent Boosting Wall Street Indexes

Tesla Stock Surges 3.6 Percent Boosting Wall Street Indexes

Trump Proposes Ending Quarterly Reports for Wall Street Companies

Trump Proposes Ending Quarterly Reports for Wall Street Companies

EU Regulators Seek Stricter Crypto Supervision by ESMA

EU Regulators Seek Stricter Crypto Supervision by ESMA

Elon Musk Buys $1 Billion in Tesla Shares, Boosting Stock by 7%

Elon Musk Buys $1 Billion in Tesla Shares, Boosting Stock by 7%

China Investigates Nvidia for Competition Law Violations

China Investigates Nvidia for Competition Law Violations

USA and China Agree on Tiktok Deal Framework

USA and China Agree on Tiktok Deal Framework

Black Soldier Fly Oil and Protein Developed for Animal Feed

Black Soldier Fly Oil and Protein Developed for Animal Feed

Basmati Rice Dispute Stalls EU-India Trade Agreement

Basmati Rice Dispute Stalls EU-India Trade Agreement

Gaming Companies Lead Gains in Slightly Rising Stockholm Stock Market

Gaming Companies Lead Gains in Slightly Rising Stockholm Stock Market

Sweden Construction Costs Rise 0.4% in August Amid Higher Electricity Prices

Sweden Construction Costs Rise 0.4% in August Amid Higher Electricity Prices

Swedes Report Decreased Satisfaction with Banks This Year

Swedes Report Decreased Satisfaction with Banks This Year

Fashion Trade Sales Rise for Third Consecutive Month

Fashion Trade Sales Rise for Third Consecutive Month

Powell's Rate Signal Influences Swedish Households Too

Powell's Rate Signal Influences Swedish Households Too

Asian Markets Rise Despite Weak China Data

Asian Markets Rise Despite Weak China Data

ANZ Bank Faces Record Fines for Bond Deal Misconduct

ANZ Bank Faces Record Fines for Bond Deal Misconduct

Trump Welcomes Foreign Investment and Workforce in the USA

Trump Welcomes Foreign Investment and Workforce in the USA

Government Boosts Support for Sweden's Regional Airports

Government Boosts Support for Sweden's Regional Airports

Klarna CEO: Embracing "Swedishness" as a Key Asset

Klarna CEO: Embracing "Swedishness" as a Key Asset

Handelsbanken Swish Payment Disruption Resolved

Handelsbanken Swish Payment Disruption Resolved