Sweden: Inflation forecast – Low inflation now, gradually rising prices ahead

Danske Research Team Danske Bank A/S

In recent months, inflation has been remarkably low as a result of previously subdued global price pressures, last year’s appreciation of the krona and significant tax cuts that directly affect consumer prices. These tax cuts, such as lower taxes on fuel and reduced VAT on food, mean that inflation will be around 1.6 percentage points lower for most of 2026 than it otherwise would have been. We expect the Riksbank to take this into consideration and look through these tax effects when deciding on monetary policy in the coming months. If we disregard the tax effects, core inflation is still only around 1% and CPIF is slightly below 2%. However, with the Strait of Hormuz still closed, it is reasonable to believe that we have passed the point where supply disruptions will simply go unnoticed. Our forecasts show that inflation will remain low in the near term and that higher prices will start to feed through more broadly after the summer.

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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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