Inflation is on the way down. But it is still higher than expected, based on the figures that Statistics Sweden presented on Friday.
That’s how much prices rose in May
The rate of inflation, i.e. price increases, according to the CPI was 3.7 percent in May 2024.
It is less than in April, when the inflation rate was 3.9 percent. But not much less.
Many goods increased
– The rate of inflation decreased in May, even though most services increased in price. It was the electricity prices that largely contributed to the decline, says Caroline Neanderprice statistician at Statistics Norway.
If you instead calculate according to CPIF, the inflation rate was 2.3 percent in both May and April.
CPI stands for consumer price index, while KPIF stands for consumer price index with fixed interest.
Taylor Swift and Eurovision drove up the prices
Many observers saw that Taylor Swift’s visit to Sweden in May would contribute to the country’s economy in the form of tourists’ restaurant visits and hotel stays. But the flip side of the coin is that that kind of consumption pattern also drives up inflation.
That’s what Avanza’s private economist thinks Felicia Schoen who call it a Taylor Swift effect.
– We can state that the Taylor Swift effect is visible in the inflation figures after all. Inflation, measured as CPI, was higher than expected. The main contributors to inflation are accommodation, travel and transport. It is very likely that it has to do with May’s two big events: the Taylor Swift concert in Stockholm and Eurovision in Malmö. says Felicia Schön to News24.
Inflation is higher than the Riksbank’s target of 2 percent at an annual rate, and therefore a cut in the key interest rate in June can now be almost completely ruled out. But the trend is still going in the right direction as far as inflation is concerned. It is falling, albeit as quickly as the assessors had hoped.
– Despite the fact that inflation came in higher than expected, it still has a clear downward trend. It is the continuing effects of higher interest rates that largely keep inflation up, she says and continues:
– When these effects subside, we can expect inflation to fall more and more. It is therefore of the utmost importance that the Riksbank acts with more interest rate cuts now, and does not let the economy suffer a setback.
Thedéen snoozes in June
Therefore, there probably won’t be any interest rate cut in June, she believes.
– Even if the Riksbank snoozes on June’s interest rate cut, I think you can set yourself up for sharply reduced interest rates in the second half of the year, given that nothing else unforeseeable happens, of course, says Felicia Schön.
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