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Fast Comment SwedenApril CPI rebounds as expected

  1. Inflation back at the Riksbank's target
  2. Outlook for 2019 still intact
Inflation back at the Riksbank's target
The April CPI report shows that headline CPIF inflation rose two tenths to 2.0 percent, back at the Riksbank's target. The headline figure was less than 0.1 p.p. below our forecast due to lower energy prices than expected. The underlying inflation, measured as CPIF excluding energy, rose to 1.6 percent, as expected. International travel prices rose 22 percent m-o-m, which was higher than expected (13 percent). This component is volatile and driven by the timing of Easter.
Outlook for 2019 still intact
Overall, the figure was basically in line with our and the Riksbank’s forecast. The outcome does not change our view of inflation ahead. Admittedly, some leading indicators have deteriorated since we published our latest full macro report on April 9, which raises questions about underlying inflation. However, on the other hand, the krona has weakened substantially. The bottom line is that CPIFXE is still forecast to rise, before turning lower again next year when we think the economy will have cooled more materially.

Source: Macrobond


Source: Macrobond


Source: Macrobond


Kiran Sakaria

Junior Strategist

Foreign Exchange and Fixed Income

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