As an expat living in Sweden the 9.34 percent year-on-year inflation, as measured by the Consumer Price Index (CPI), might seem alarming. Yet, the update from Statistics Sweden for July aligns largely with expectations, which means it isn’t as dire as it sounds.
Leaving out rising mortgage interest rates, the CPIF measurement also remained steady at 6.4 percent, just below than what was anticipated. Interestingly, the stability in the inflation rate has allowed economists to breathe a sigh of relief.
The Riksbank and Interest Rates
You see, a stable inflation rate, according to experts, makes it less likely for the Swedish Central Bank, Riksbank, to plan another interest rate hike apart from the one expected this September. The one thing that could thwart this sigh of relief amongst experts? Sharp falls in inflation this autumn.
“But that’s assuming that inflation falls this autumn,” remarked SEB economist Olle Holmgren to the Swedish news agency TT.
Price Hikes: Food and Holidays
Package holidays and food were the primary drivers of rising prices in July. After a downturn in food prices during spring, they bounced back by 1.4 percent in July, regaining the levels seen in March. If you’ve suddenly noticed your food bill climbing in recent times, you’re not alone.
Usually, food prices in Sweden fluctuate throughout the year depending on the seasons and what fruits and vegetables are currently abundant. However, this increase surpassed the typical one percent rise Sweden usually experiences in July.
The Swell in Food Prices
Yellow onions hit our wallets the hardest, costing 29.2 percent more than in June (a shocking 55.57 percent more than July last year). The prices of pears, canned herring, cucumbers, and tomatoes followed suit. Curiously, despite an 10.9 percent month-on-month increase, cucumbers were 18.7 percent cheaper compared to last July.
In Conclusion…
As expats, understanding these fluctuations would undoubtedly help us navigate our day-to-day expenses better. For now, stay calm – the situation isn’t as bad as it could’ve been thanks to the steady inflation rate. However, as autumn looms, how this scenario might change remains to be seen. So, keep your eyes peeled!
