Ahead of May Flash CPI

SEB's inflation forecast for May suggests CPIF will reach 1.2% y/y, notably below the Riksbank's 1.6% estimate. The cooling is driven by lower mortgage rates, food price deceleration, and slowing service costs.

Key Takeaways

• 1.SEB forecasts May CPIF at 1.2% y/y, significantly lower than the Riksbank's projection of 1.6%.
• 2.Lower mortgage interest rates and declining food prices are driving downward pressure on the Swedish headline CPI.
• 3.Service sector inflation has seen a broad-based slowdown in Q1, with transport services and administrative costs like insurance decelerating.

Table of Contents

• Inflation: SEB vs. Riksbank forecast
• Headline CPI
• Monthly price changes have slowed markedly
• Core HICP declined to 0.9% in February and March
• Consensus forecast errors
• Food prices slowed already ahead of the VAT reduction
• Downward pressure from SEK in 2026
• Downward pressure from the exchange rate is approaching a trough
• Rents are rising at a slower pace, from high levels
• Tax deduction for repairs of own homes
• Slightly lower service inflation in 2026
• Producer prices (PPI) on consumer goods
• Producer prices (PPI) on food
• Smaller increase for total PPI in Sweden than in Germany
• Electricity increased markedly in May, but will decline in June
• Swedish food prices
• Early signs that food prices could increase again?
• International commodities
• Coffee prices turning lower
• Will freight costs rise again?
• Retail pricing plans rebounded in April
• Pricing plans in Germany declined in May
• Clothes and shoes prices have continued to rise but is finally slowing
• Price expectations in the service sector
• Marked slowdown in service inflation
• Industrial sector wage agreement
• Administrative prices are slowing
• Transport services prices have declined
• Package holidays rising again after slowdown in early 2025
• Near-term inflation expectations falling below target

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