Inflation dropped sharply in April

Inflation in Sweden fell unexpectedly sharply in April, despite rising fuel prices in the wake of the Iran war. According to a preliminary calculation from Statistics Sweden, CPIF inflation landed at 0.8 percent – a clear decrease from 1.6 percent in March.

The main factor behind the decline was falling food prices, where the reduced food VAT has had a major impact. Food prices decreased by 5.5 percent compared to the previous month and are now 5.7 percent lower than the same period last year, according to news agency TT.

At the same time, certain costs continued to rise. Transport prices increased by just over five percent year-on-year, while restaurant and hotel prices rose by just over four percent.

The decline in inflation was larger than analysts had expected. Media-reported forecasts had on average pointed towards 1.2 percent.

Excluding energy prices, the rate of inflation dropped to zero percent in April, compared to 1.1 percent the previous month. The Riksbank has an inflation target of 2 percent according to the CPIF measure.