Swedish producer prices fall in September, weakened SEK to boost consumption goods prices

Swedish manufacturers’ producer prices were little changed in September. Producer prices in total dropped 0.1 percent year-on-year in September as compared with the decline of 0.3 percent in the prior month. Sequentially, the prices fell 0.1 percent in the month, as compared with the 1 percent rise in the previous month.

According to Statistics Sweden, prices on the import market dropped 0.6 percent, while it declined 0.2 percent on the export market. Prices on the domestic market remained unchanged. Decreased prices for electricity added to the drop in the domestic market in the month. For the export market, lower prices for the production of pulp, paper and paperboard led to the decline in prices. Lower prices for crude oil contributed to the downturn in the import market, added Statistics Sweden.

On a sequential basis, prices for domestic supply dropped 0.3 percent, whereas on an annual basis, it dropped 0.5 percent. Consumer goods fell 0.3 percent sequentially and rose 0.6 percent annually in September.  In recent months, the SEK has depreciated and is expected to help stimulate prices of consumption goods in the future.

“We have included a weaker SEK and higher import prices in our inflation forecast, which nevertheless is below the Riksbank’s view. This is an important reason to why we expect the Riksbank to take action later this week”, stated Nordea Bank in a research report.