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Fast Comment SwedenSolid May CPI report

  1. Indications of a pick up in underlying inflation, much in line with our near-term outlook
  2. Spike in hotel prices might have been partly temporary, but, overall, a solid inflation print
  3. Despite near-term strength, we think inflation will fade next year, forcing the Riksbank to cancel planned rises

Please see comment and graphs below.

CPI report for May in line with our estimate and the Riksbank's forecast. A touch above the market consensus.

Today's outcome is another step on the way in the short-term rise we expect in underlying inflation, here illustrated by CPIF excluding energy. Note that energy prices have continued to fall, so our nowcast for CPIF from last week may not stand. Risk of downward revision, despite today's solid May reading. 

Core services surprised on the upside, driven partly by high hotel prices. That is similar to in 2017, when hotel prices recoiled somewhat after May, but not fully. So a risk of some easing in core services ahead, but, generally, it is a signal of further upside in underlying inflation.   

Leading indicators still overwhelmingly point to further upside in underlying inflation during at least 2019, for example, producer prices. But, during 2020, we expect the surge to fade, as we forecast the business cycle cooling further. We see no further hikes from the Riksbank in this cycle.


Johan Löf

Senior Economist


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Fast Comment Sweden


Fast Comment Sweden


Fast Comment Sweden