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Fast Comment SwedenInflation in February

  1. Gap between the inflation rate and the Riksbank's forecast largely remains... for now
  2. Among the components, upside and downside surprises
  3. More broadly, we expect inflation to trend upward in 2018, closing the gap to the Riksbank's forecast
Gap between the inflation rate and the Riksbank's forecast largely remains... for now
Today is the Day of Pi, but Swedish inflation (despite being denoted with pi in academic literature) did not contribute to the celebrations. Not only was February inflation well below 3.14 percent, it remained subdued at 1.7 percent y-o-y (our estimate: 1.6 percent, consensus median: 1.7 percent). This means that the gap to the Riksbank's forecast that appeared with the January CPI data largely remains. Turning to CPIF excluding energy, the rate moved sideways and remained at 1.5 percent, a fully-expected repetition of last month's outcome.
Among the components, upside and downside surprises
Energy as well as clothing and shoes surprised on the upside, compared with our estimate. Meanwhile, television services surprised on the downside, and it will be interesting to see if the latter was caused by temporary campaigns relating to the Olympics, which were broadcast in February. More details can be found in the tables and graphs below.
More broadly, we expect inflation to trend upward in 2018, closing the gap to the Riksbank's forecast
In the midst of an onslaught of renewed pessimism about the consumer price outlook, we once again wave a banner for a sustained positive inflation trend. Read our analysis here: http://research.handelsbanken.se/Macro-Research/All-Publications/publication/26676/macro-comment-sweden


 




 


Source: Macrobond


 Upward trend in underlying inflation, but mixed signals in February





 With renewed bouyancy in clothes, goods prices are currently not dampening inflation much






Disclaimer

Johan Löf

Senior Economist

Sweden

jolo22@handelsbanken.se

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