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Sweden's producer price inflation slows to 7.5 percent year-on-year in February

Data from Statistics Sweden showed Tuesday that Sweden's producer price inflation slowed to 7.5 percent year-on-year in February. On a monthly basis, producer prices fell 0.8 percent, reversing a 0.6 percent rise in January.

Exports prices were up 8.5 percent year-on-year, while import prices rose by 9.3 percent year-on-year. On a monthly basis, the export market showed a 1.6 percent drop, while the import prices declined 1.7 percent. An appreciation of the Swedish krona was seen as the main reason behind the fall.

Sweden’s headline inflation rate hit 1.8 percent in February, within sight of the Riksbank’s 2 percent target, but Nordea sees the number falling back again as the impact of a stronger krona drags down import prices.

Riksbank governor Stefan Ingves at a speech in Stockholm once again defended the success of its monetary policies. He said expansionary monetary policy was a “major explanation” behind the strong economic activity in Sweden. Signalling that the bank is not ready to end the stimulus, he stressed that the Riksbank is expecting inflation to stabilise “only at the end of 2018″.

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