Sweden’s weak trade data weighs on Riksbank inflation target

Sweden's import prices for consumption goods declined significantly, which was expected under current SEK development. This has further pressurized the Riksbank to achieve its inflation target of 2% in near term. January's trade balance was in line with market consensus; however, it was revised down for the fourth quarter of 2015.

Exports and imports in terms of volume decreased in January as compared to December. Meanwhile, household credit growth was firm at 7.5% y/y; however, producer prices continue to decline as they decreased by 1% m/m and by 3.1% y/y in January.