Swedish inflation dips below double digits

STOCKHOLM: Swedish inflation dipped under 10 percent for the first time in over six months in May, official statistics showed Wednesday.

Consumer prices rose by 9.7 percent in May year-on-year, down from 10.5 percent in April.

“Continued decrease in electricity and food prices contributed to the lower inflation rate in May,” Mikael Nordin, statistician at Statistics Sweden, said in a statement.

At the same time, costs of certain goods and services rose, “for instance hotel and restaurant visits, recreational services, and clothing,” the agency said.

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Inflation peaked in December at 12.3 percent – a more than 30-year high – then slowed slightly in January to 11.7 percent, but unexpectedly spiked back to 12 percent in February.

Like its peers in the United States and Europe, Sweden’s central bank has repeatedly hiked its guiding rate in an effort to rein in inflation.

The Riksbank raised the rate to 3.5 percent in late April and said it would “probably” raise it by another quarter-point in June or September.

Inflation adjusted for fixed interest rates (CPIF) – the figure used by the Riksbank to guide monetary policy – was 6.7 percent in May, compared to 7.6 percent in April.

For 2023 as a whole, the central bank expects the Swedish economy to contract 0.7 percent, and has forecast unadjusted inflation of 8.9 percent and rising unemployment.