December inflation review Sweden

Danske Research Team Danske Bank A/S

The final inflation figures for December confirmed the flash estimate. CPIF excluding energy showed 2.4% year-on-year, CPIF 2.3% and CPI 0.3%. The decline in November compared to October was larger than usual with -0.6% in core inflation. This was mainly due to a greater-than-expected decrease in recreation. Of the 0.4 percentage point forecast error in core inflation, 0.3 percentage points were explained by the unexpected drop in recreation, primarily from package holidays. The remaining forecast error stems from goods prices, including clothing and furniture, with clothing declining slightly more than anticipated, likely due to more and earlier Black Friday sales than expected.

We expect that the drop in package holidays in November to be temporary and that some of it will bounce back. We expect core inflation in December at 2.6% year-onyear and we expect energy prices to be low due to the mild winter weather, resulting in CPIF at 2.5%.

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Author

Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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