In August, Sweden's inflation rose to 3.2%, while food prices decreased for the first time this year, according to SCB. Despite the overall inflation increase, prices for grapes, leeks, and cabbage saw significant drops. The trend offers relief to households and may allow the Riksbank to consider lowering interest rates.
Inflation Rises in August as Food Prices Drop for the First Time This Year
Inflation Rises in August as Food Prices Drop for the First Time This Year
Inflation is on the rise. However, food prices have decreased for the first time this year, according to fresh statistics from SCB.
The Riksbank aims for an inflation rate of 2 percent.
Swedish inflation is currently above that target.
In August, inflation rose to 3.2 percent according to KPIF, which measures inflation excluding the effect of interest rates.
This aligns with the trend of high inflation observed over the summer. In July, prices increased by 3 percent, and the month before, the rate of price increase was 2.8 percent.
Grapes and Cabbage
Prices for food and non-alcoholic beverages fell for the first time since the beginning of the year. In August, food prices dropped by 0.7 percent compared to July, according to Statistics Sweden (SCB).
Prices for leeks, grapes, and cabbage saw the most significant decreases. However, other items on the grocery shelves continue to climb, such as dairy products, sweets, ice cream, and chocolate.
Compared to August last year, food prices have risen by 4.7 percent.
Prices for package holidays and international flights decreased more than usual from July to August. It also became cheaper to rent a car, which is in line with the season.
At the same time, electricity prices surged.
"Electricity prices increased more than they usually do from July to August, while prices for food and non-alcoholic beverages fell for the first time since the beginning of the year," says Caroline Neander, price statistician at SCB, in a statement.
Economist: Relief
The break in the trend of rising food prices is a relief, according to Frida Bratt, savings economist at Nordnet.
"It has been a concern, especially for households with tight budgets. But also for the Riksbank, which wants to support the Swedish economy with lower interest rates. As long as we have a broad inflation increase, it's very difficult. But with diminishing holiday effects and a trend break for food prices, the stage is set for the Riksbank to lower interest rates later in September," she writes in a comment to Expressen.