Inflation is now clearly falling, below the Riksbank's target, according to Nordea's economists, who do not entirely rule out a rate cut as early as June.
Next Friday, SCB will release new Swedish inflation figures. Nordea's chief analyst, Torbjörn Isaksson, predicts that the rate of price increases will land at 2.0%, according to the Riksbank's main indicator KPIF (i.e., consumer prices minus interest rate changes).
This is significantly below the Riksbank's own latest assessment.
It is mainly food and electricity that contribute to dampening price increases, but previous price increases in other goods and services have also decreased noticeably.
Thereafter, inflation will fall below the Riksbank's inflation target of 2%. And it will stay there for the rest of the year, according to Nordea.
"The overall picture is intact, inflation pressure is low," writes Torbjörn Isaksson in an analysis on Friday.
Riksbank Governor Erik Thedéen has recently consistently held fast to the view that another rate cut at the June meeting is almost ruled out. However, Nordea economist Isaksson is not entirely sure about this commitment, especially since the krona has also strengthened significantly in recent times.
"Regardless, it strengthens our view of more rate cuts in the second half of the year than the Riksbank is currently signaling," writes Torbjörn Isaksson.
The Riksbank has said that it is likely to be two rate cuts in the second half of the year. In May, the rate was cut to 3.75%.
Even Handelsbanken notes that inflation appears to be landing lower than the Riksbank's own forecasts, but statistics have recently tended towards slightly higher inflation in the future than previously estimated by the bank's economists.
Handelsbanken holds fast to its earlier rate assessment, two cuts from the Riksbank in the second half of the year.
