Swedish CPIF inflation likely to have come in at 1.7 pct in February – Nordea Bank

Swedish inflation continues to be a headache for the Riksbank. According to a Nordea Bank research report, CPIF inflation excluding energy is expected to have stayed at around 1.5 percent in February and in months ahead. CPIF inflation is expected to have come in at 1.7 percent.

In January, inflation came below expectations but was completely consistent with expectations of lower inflation in 2018 than in 2017. Clothing and footwear prices delivered the biggest surprises because of a bigger-than-expected January sale. But more important is the overall picture of weak inflation pressures over the past months.

The reasons behind this trend are low global inflation and modest domestic wage growth. Against this background, the current inflation trend is not surprising. Moreover, the temporary effects seen last year have begun to wear off.

“We expect CPIF inflation ex energy in February to come out at 1.5 percent y/y and core inflation to remain around this level for the better part of 2018, with the risk tilted towards an even lower inflation path. CPIF inflation including energy in February and coming months is expected to be slightly higher at around 1.7 percent”, stated Nordea Bank.

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