Inflation in Sweden Hits Highest Rate in Over 30 Years
Galloping inflation has been witnessed across the globe amid high energy prices and bottlenecks within delivery chains, with numerous countries, including economic powerhouses such as the US, breaking their decades-old records.
Inflation in Sweden continues to increase. In May, the inflation rate (according to the consumer price index with a fixed interest rate) reached 7.2 percent, its highest since December 1991, when it was 7.8 percent, according to Statistics Sweden.
Rising food prices contributed strongly to the inflation rate, Carl Mårtensson, a price statistician at Statistics Sweden, said in the authority's press release.
In April, the inflation rate was 6.4 percent. The monthly change in May was mainly driven by price increases in food and non-alcoholic beverages. Meat together with milk, cheese and eggs were the primarily contributors. However, tomato prices have increased over the past five months but decreased in May. In addition to food prices, electricity, recreation and culture contributed to the monthly increase.
Clothing, furniture as well as restaurants and hotels have increased in price. At the same time, the price increases were somewhat offset by lower diesel prices in May.
“The price increase from May 2021 to May 2022 was the largest annual change in 39 years when it comes to food and non-alcoholic beverages. Increased electricity prices and transport prices, which include fuel and the purchase of cars, also contributed to the annual change,” Statistics Sweden said in a press release.
According to national broadcaster SVT's financial commentator Kristina Lagerström, inflation risks, among other things, spurred sharp interest rate increases and higher mortgage rates.
“There is still very good momentum in the labour market. It can facilitate higher wages and compensate for the increase. But if wage increases are too large, so are the costs for companies, which is why we risk ending up in a negative spiral with rising wages and prices – where no one wins,” Lagerström mused.
According to Lagerström, the inflation figure may affect the key rate of the Central Bank, which was raised at the end of April from 0 to 0.25 percent.
“I think that contributes to the fact that it may increase by 0.5 percent. The Central Bank has seriously misjudged this during the autumn, as have other central banks and economic analysts,” she mused.
Meanwhile, a similar picture with galloping inflation has been witnessed in other countries as well, both inside the EU and in the West in general, amid high energy prices and bottlenecks within delivery chains. Inflation in the US is at a 40-year high, but America isn't alone, as soaring prices have become a truly global phenomenon. Amid criticism of being unable to deal with the issue, US President Joe Biden habitually blames the ongoing Russian special operation in Ukraine and President Vladimir Putin personally for fanning the flames of inflation.