SWEDISH inflation fell slightly last month as energy cost hikes receded, but consumer price increases remained in the double digits at 10.6%, official statistics showed today.

The national statistics agency noted that electricity prices had fallen for three consecutive months, decreasing by 2.2% in March.

Over the last 12 months fuel prices had come down 8%, Statistics Sweden said.

“The inflation rate fell in March, which was partly due to the slowdown in the rise in energy prices,” said SCB price statistician Carl Martensson.

While being pushed by energy costs in the autumn, “prices for food and non-alcoholic beverages rose by 19.7% in the past year and 1.2% since February.”

Inflation in Sweden peaked in December at 12.3% – a more than 30-year high – then slowed down slightly in January to 11.7%, but unexpectedly spiked back to 12% in February. 

Sweden’s central bank Riksbank has repeatedly hiked its guiding rate in an effort to rein in inflation.

The key rate has increased from zero in April last year to 3.0%, with another potential rise expected later in April and potentially another in June.

Consequently, Swedish households also saw increased costs from interest rates on mortgages, which contributed with 2.8 percentage points to the annual inflation rate.

Sweden’s inflation adjusted for fixed interest rates – the figure used by the Riksbank to guide monetary policy – was 8.0% in February, down from 9.4 in December.

For 2023 as a whole, the central bank expects the Swedish economy to contract 1.1%, unadjusted inflation of 8.6% and rising unemployment, according to its latest forecast in February. 

In the European Commission’s latest forecast, Sweden is the only EU country expected to see its economy contract this year. – AFP, April 14, 2023.