Sweden’s inflation in May came in slightly below projections. On a year-on-year basis, the nation’s consumer price index inflation was 0.6 percent in May, as compared to the consensus projection of 0.7 percent. Meanwhile, CPI, on a sequential basis rose to 0.18 percent from 0 percent. It was below consensus expectations of 0.3 percent. There were many downside surprises that suggest a low outcome.
The inflation rate according to CPIF was 1.1 percent y/y in May 2016, as compared to the previous month’s 1.4 percent and consensus expectations of 1.2 percent. On a sequential basis, CPIF rose 0.2 percent, slightly below consensus projection of 0.3 percent and up from April’s 0 percent. CPIF, stripping energy, came in at 1.4 percent y/y, down from April’s 1.8 percent.
Foreign travelling mainly surprised on the downside in May. It contributed just 0.08 percentage points to the CPI month-on-month. Meanwhile, fuel prices also came in slightly below projections, whereas food prices increased slightly in May.
May’s inflation data highlights that it will be quite difficult for the Riksbank to meet the target rate of 2 percent. It takes more than just below-expected inflation reading for the central bank to undertake measures, and the inflation figures released on Tuesday do not alter much before the monetary policy meeting in July.
The central bank is expected to keep the policy unchanged in July and is unlikely to add additional stimuli measures either, said Nordea Bank in a research report.
The material has been provided by InstaForex Company – www.instaforex.com