Sweden: Higher global price pressure and 'chipflation' now visible in Swedish inflation

Danske Research Team Danske Bank A/S

July final inflation confirmed the flash estimate with revisions only to the second decimal. CPIF-XE came in at 0.60% (flash 0.60%), CPIF 0.73% (flash 0.75%) and CPI 0.18% (flash 0.21%). From July, an additional tax cut on fuel was introduced and CPIF is now 1.4 percentage points lower than it otherwise would have been because of this. Hence, CPIF would have been 2.1% instead of 0.7% had it not been for the tax cuts. CPIF-XE would have been 1.3%. It is worth noting that monthly public transport ticket prices were cut in half from July, with an estimated effect on inflation of around 0.1 percentage points, which is not considered a tax effect by Statistics Sweden and therefore not controlled for in CPIF-XE-CT and CPIF-CT. The July details confirmed that the upside surprise in goods prices was broad based and likely reflecting the high global prices seen during the spring. Prices on IT equipment surged month-over-month as result of rising input prices on for example memory chips.

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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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