Swedish Headline Inflation Slows to 1.3% in June, Flash Estimates Show
Sweden's Inflation Trends and Economic Outlook
June Inflation Data and Key Drivers
STOCKHOLM, July 8 (Reuters) - Swedish consumer prices, measured with a fixed interest rate (CPIF), were up 1.3% year-on-year in June, a flash estimate released by the statistics office showed on Wednesday.
Stripping out volatile energy costs, a measure followed closely by the central bank, inflation was 0.4% on an annual basis.
Factors Behind Slower Inflation
"The pace of inflation eased in June as a result, among other things, of lower food prices and transport costs," statistics office official Mikael Nordin said in a statement.
The outcome was marginally higher than analysts and the Riksbank had forecast though the pace of inflation slowed from May.
External Influences on Inflation
Impact of Global Events and Currency Strength
The effects of the Iran war on headline inflation have been muted compared to most of Europe thanks to Sweden's largely fossil-free energy mix, a stronger crown currency and temporary tax cuts by the government.
Central Bank's Response and Future Outlook
However, the central bank warned in June that rising inflationary pressures meant there was a 50-50 chance of a rate hike before the end of the year.
Since then, conflict in the Gulf has flared up again, despite an interim peace deal, though oil prices have fallen back to where they were in March.
Analysts expect price pressures to remain muted in the months ahead, giving the Riksbank little cause to act on rates.
Economic Growth and Upcoming Decisions
Recent Economic Performance
Separate data showed the economy grew 0.9% in May from the previous month and was up 3.9% from the same month a year ago. The bounce, from 0.6% the previous month, was due to higher production in the services sector and lower imports, the statistics office said.
Key Dates for Monetary Policy and Inflation Data
The Riksbank publishes its next decision on monetary policy on August 20. Final inflation figures are due on July 15.
(Reporting by Simon Johnson in Stockholm and Jesus Calero in Gdansk, editing by Louise Rasmussen and Tomasz Janowski)
