Sweden’s inflation reaches a 30-year high
Swedish inflation reached its highest level in three decades in March when global energy prices rose, official figures showed on Thursday.
The fixed-price consumer price index accelerated sharply last month in the Scandinavian country, reaching 6.1 per cent compared with a year ago, after rising by 4.5 per cent in February.
Prices of food and non-alcoholic beverages rose, “but it was mainly rising electricity and fuel prices that had a major impact”, says Caroline Neander, statistician at Statistics Sweden, in a statement.
Sweden has not seen such inflation since December 1991 and excluding energy costs, inflation was still 4.1 percent, according to the National Statistics Agency.
Prices were already rising in major economies when Russia’s invasion of Ukraine sent shockwaves through global energy, food and commodity markets.
Despite the accelerating inflation, Sweden’s central bank, the Riksbank, has so far refrained from significantly changing its interest rate path over the next three years, as the rise in prices is judged to be mainly temporary.
The main indicative interest rate, the repo rate, is currently at zero and is expected to remain at zero until the second half of 2024 to support the recovery of the economy, according to the Riksbank’s latest announcement in February.
After falling sharply against the euro during the first quarter, the Swedish krona has begun to recover and is currently trading at around SEK 9.7 per euro.
In the euro area, inflation hit a record 7.5 percent in March, but the European Central Bank is also taking a wait-and-see approach, while other major central banks such as the US Federal Reserve have begun to raise interest rates.
AFP