Consumer prices rose by 10.2 percent in a year. The rising cost of electricity depresses the purchasing power of money.
At the end of the year, Sweden saw the highest inflation in thirty years.
In December, consumer prices were 10.2 percent higher than at the same time a year ago. Inflation had risen by 1.9 percentage points since November.
The information appears from the review published by Statistics Sweden on Friday.
The strongly accelerated inflation exceeded analysts’ forecasts. The experts interviewed by the news agency Reuters predicted that prices will rise by 9.9 percent in a year.
In November, the Riksbank of Sweden had estimated that annual inflation would remain at 9.1 percent.
At the end of the year, inflation in Sweden was more than one percent higher than in Finland. In December, consumer prices here had risen by 9.1 percent from a year ago, Statistics Finland announced on Friday.
According to preliminary data, inflation in the entire euro area was 9.2 percent in December.
Interest rates continue to rise
However, according to Nordea, the inflation currently seen in Sweden is not as dramatic a phenomenon as it may suddenly appear. According to the bank, the increase in prices is largely explained by the increase in the cost of electricity.
In Sweden, the price of electricity rose by almost 30 percent during November and December. After the turn of the year, the price of electricity has started to fall.
– This means that overall inflation will probably be close to the central bank’s estimate again in January, Nordea commented in the release.
Central banks around the world have recently raised key interest rates, which has increased the costs of mortgages, for example.
In Sweden, the central bank raised its key interest rate by 0.75 percentage points to 2.5 percent in November. At that time, the Riksbank’s CEO Stefan Ingves said the central bank would consider further interest rate revisions in early 2023.
As inflation is now higher than expected, the market is considered almost certain to raise the key interest rate, writes news agency Reuters.
Globally, the inflation that eats away at the purchasing power of consumers has already started to show some signs of abating. In the United States, the rise in prices stopped in December for the first time in two and a half years.
Source: Reuters
Read more:
Sweden’s central bank is trying to curb inflation
Sweden’s inflation faster than Finland’s – the central bank is gearing up for three interest rate hikes