Sweden: Inflation forecast CPIF with constant taxes 2.6% in May

Danske Research Team Danske Bank A/S

The oil price has fallen below USD 80 per barrel due to the easing of the conflict in the Middle East. However, supply chain disruptions and elevated geopolitical risks in the region are likely to remain a concern and contribute to upward pressure on prices. We have revised our forecast to reflect lower energy prices in the near term but still view the risk of higher core inflation as elevated.

Headline inflation in the near term is low, but this is largely due to tax cuts. CPIF with constant taxes rose to 2.6% in May, while the new measure, CPIF-XE-CT, reached 1.3%. Both clearly illustrate the significant tax effect currently pushing down headline inflation. Looking ahead, further tax cuts on fuel and subsidies for public transport tickets will contribute to even lower headline inflation.

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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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