March 15, 2021
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Sweden: eating disinflation in Feb-21

  • The inflation rate according to the CPIF (CPI with fixed interest rate) was 1.5% y-o-y in February 2021, down from 1.7% in January. CPI inflation was 1.4%, some way below the consensus of 1.6%, although the outcome was only 0.1pps shy of our forecast.
  • The Riksbank expects that it will be 2023 before CPIF inflation returns to the 2 per cent target on a more sustainable basis. We also see an imminent rise above 2% as fleeting.

February 19, 2021
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Riksbank: relaxed about excess inflation

  • The minutes of the latest Riksbank Monetary Policy Meeting showed strong support for unchanged policy settings.
  • Despite Sweden’s better than expected economic performance since the November meeting, there was a dovish tone to the debate, with several members showing a willingness to cut the repo rate if needed.
  • Even in a scenario where the economy recovered more quickly than expected, it was felt that an inflation overshoot could help to anchor expectations more firmly around the target.

February 18, 2021
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Sweden: CPIF jumps into its new basket

  • CPIF inflation was 1.7% in January 2021, up from 0.5% in December.
  • Larger than usual shifts in spending patterns during 2020 caused the basket weight of services like air travel to fall, while those of products like home electronics have risen.
  • The Riksbank is likely to look through any pandemic related volatility in CPIF inflation.