Inflation in Sweden Reaches Highest Level Since 1991, Keeps Rising
Over the course of the past several months, inflation has soared across Europe and the West at large, reaching levels unseen in decades, amid high energy prices and fears that the conflict in Ukraine, coupled with massive sanctions, may lead to further interruptions of oil and natural gas supplies from Russia.
Monthly inflation in Sweden has reached 6.4 percent in April, a 31-year-high, according to the country's Statistics Bureau.
In March, inflation was 6.1 percent year-on-year, and analysts expected it to increase by 0.1 percent. However, reality took a more grim turn.
Statistics Sweden said food prices increased above all, with meat and vegetables being “the primary contributors” to the hike. Clothing and books saw seasonal price increases, while furnishing and household equipment prices “have now risen for six consecutive months”.
“There was a continued broad price increase in April, with price increases for, among other things, food, household goods, restaurant visits and hotels,” Mikael Nordin, a price statistician at Statistics Sweden, said in a press release.
By contrast, electricity and fuel prices have fallen slightly compared with the previous month, but remain significantly higher than a year ago. Still, the highest annual price increases were seen in fuel (44.9 percent), electricity (32.4 percent), transport (11.6 percent), and housing and furnishing (both 8.5 percent).
Overall, inflation is now at its highest level since December 1991, when it was 7.9 percent.
The current development increases the risk that the Riksbank, Sweden's central bank, will raise the interest rate even faster than planned, which, in turn, will push up mortgage rates.
“Inflation will rise and stick up there for a longer period than the Riksbank expects,” Lars Kristian Feste, the head of interest rates at Öhman Fonder, commented on the figures by Statistics Sweden. He estimated that the policy rate will thus be 1.50 percent at the turn of the year – up from today's 0.25 percent.
In recent months, inflation has soared across Europe and the West at large amid high energy prices and fears that the conflict in Ukraine, alongside massive sanctions imposed by the West itself, may lead to further interruptions of oil and natural gas supplies from Russia.
Sweden is a member of the European Union, but is not in the eurozone, which spans 19 member states. Annual inflation in the eurozone hit a record high of 7.5 percent last month.
By contrast, the US saw consumer prices jump 8.3 percent last month from a year ago, remaining close to a four-decade high.