Sweden’s core inflation, gauged by CPIF stripping energy, decelerated to 1.8% in April from March’s 1.9%. April’s print was on par with Riksbank’s projection. Meanwhile, CPIF including energy reached 1.4% y/y in April, in line with central bank’s forecast and slightly lower than consensus projection of 1.5%.
On a month-on-month basis, CPIF was 0%, as compared with consensus expectations of 0.1%. Sweden’s CPI inflation was flat at 0.8% y/y in April, as compared with Riksbank and consensus projection of 0.9%. On a monthly basis, CPI inflation was 0%, as compared with consensus forecast of 0.1%.
April’s inflation data for Sweden suggests a reduction in the possibility of Riksbank to further ease policy. Moreover, there have been rise in inflation expectations that are now close to the target rate of 2%, according to the Prospera survey. Furthermore, the Swedish krona depreciated on the outcome.
Overall, the Riksbank is expected to keep its policy unchanged during its July meeting, based on the current scenario. The central bank is unlikely to approve additional stimuli measures this year and nor in 2017, said Nordea Bank in a research report.
