Swedish inflation shows slight decrease after reaching a record 12.4%

By Al Mayadeen English
Source: Agencies
14 Apr 2023 15:36

A decrease in energy costs triggers a shrinkage of Swedish inflation rates after they reached a record number in December 2022.

The sign of the Swedish Central Bank, Riksbank, as seen in Stockholm, Sweden, 12 August 2016. (Reuters)

As energy costs shrunk, Swedish inflation marginally decreased, while the consumer price index stalled at 10.6%, according to official sources.

The national statistics agency revealed that electricity prices were on a downward trend for three consecutive months, marking a 2.2% decrease in March.

Statistics Sweden (SCB) stated that over the last 12 months, fuel prices have decreased by 8%.

Carl Martensson, a statistician at SCB said, "The inflation rate fell in March, which was partly due to the slowdown in the rise in energy prices."

Energy costs pushed "prices for food and non-alcoholic beverages rose by 19.7 percent in the past year and 1.2 percent since February."

Inflation peaked in December and was recorded at 12.4%, which is also a more than 30-year record. It went down to 11.7% in January but quickly changed course in February, increasing to 12%.

The interest rate in Sweden was increased by the Central Bank (Riksbank) in an attempt to halt and reverse increasing price trends.

The key rate, the rate at which commercial banks can borrow, increased from zero to 3.0% in April 2022. Experts speculate another rise in the rate later this month.

As a result, mortgage interest rates rose, adding 2.8 percentage points to the annual inflation rate.

Riksbank expects a 1.1% shrinkage in the Swedish economy as well as an 8.6% unadjusted inflation rate, in addition to increased unemployment.

According to the European Commission, Sweden is the only EU country whose economy is expected to contract this year.