Swedish May Flash Inflation Review

Swedish CPIF inflation rose to 1.5% y/y in May, exceeding expectations due largely to higher services prices. Despite the uptick, Nordea maintains that inflationary pressures remain low and expects the Riksbank to keep rates unchanged at 1.75%.

Key Takeaways

• 1.Swedish inflation rose in May, with CPIF at 1.5% y/y and CPIF ex energy at 0.5% y/y, exceeding expectations.
• 2.Services inflation, specifically volatile foreign travel prices, appears to be the primary driver of the upside surprise.
• 3.Nordea maintains the view that the Riksbank will keep the policy rate on hold at 1.75%.