Swedish Food Prices See Record Surge in 70 Years Amid Rampant Inflation

The massive increase in food prices, with some items becoming as much as 80 percent more expensive, has baffled analysts. They pinned the initial rise on the overall surge in energy and electricity prices, which have since subsided – yet with no visible effect on the inflation rate.

Food prices in Sweden have surged over 20 percent over the past 12 months, recording their highest spike in over 70 years, Statistics Sweden has reported.

Between February 2022 and February 2023, food and non-alcoholic beverages soared nearly 21 percent, the biggest jump since the beginning of the 1950s.

"In the 1970s and 80s, food prices also increased a lot, but not as quickly as they do now. We have to go back to 1951 to find the most recent twelve-month span when food prices increased by over 20 percent," Statistics Sweden price statistician John Eliasson said in a statement.

In particular, butter, eggs and dairy products rose by more than 30 percent, whereas some of the vegetables, such as leeks and cauliflower jumped by almost 80 percent.

National broadcaster SVT's economic commentator Alexander Noren called the trend "worrying." He also warmed that inflation will be even harder to check if the trend persists.

The price jumps are even more disconcerting and inexplicable for Swedish shoppers given the fact that authorities and analysts alike initially pinned the increase on the spike in energy and electricity prices, which have since abated.

"Electricity prices are falling, but other things have increased faster than we expected," chief strategist at Handelsbanken Claes Mahlen told Swedish media.

Meanwhile, traders have warned that the soaring prices do not correspond with stores' increased revenues. On the contrary, grocery stores are starting to go bankrupt, professionals have warned, stressing that the rampant food prices are a concern for the industry itself.

The overall inflation in Sweden has remained on a consistently high level over the past few months. According to the very same Statistics Sweden, the country's inflation rate hit a 31-year high of 12.3 percent in December 2022. After a slight fall to 11.7 percent in January, it rose above the 12-percent threshold again in February.

The price increase spans over various areas from recreation, culture and consumer electronics to clothing, furniture, accommodation and services.

In February, Sweden's economy was named the worst performer among the EU's 27 member states in the European Commission's latest report. Sweden's economy contracted by 0.2% in the fourth quarter of 2022, with the decline affecting business investment and household consumption.

Both the massive inflation and the rising housing costs are largely a by-product of the backfiring sanctions the EU has imposed on Moscow in a bid to "punish" it for the ongoing special operation in Ukraine and damage the Russian economy. Sweden's economic debacle has been aggravated by the population's exorbitant level of indebtedness, which, combined with traditionally variable interest rates further strangles Swedes' purchasing power.