Rising energy and service prices contributed to the inflationary upturn. But the upturn is broader than that. Commodity prices and input goods more broadly are now rising in price.
We are starting to see some more direct effects on Swedish inflation figures as well, says Susanne Spector.
“Upside risks”
The increase in inflation from 0.8 percent in April was larger than expected. Analysts on average had expected inflation to rise to 1.3 percent in May, according to Bloomberg.
It’s too early to say where it will go, but it underlines the upside risks that exist, she says.
Excluding energy prices, inflation rose to 0.5 percent, from 0.0 percent in April.
So inflation is still well below the Swedish Central Bank’s inflation target of 2.0 percent. But then you have to remember that reduced taxes, primarily food VAT but also dental care from the turn of the year and, from the next half-year, reduced fuel taxes, are putting pressure on inflation.
Without the tax effects, inflation would have been above target, says Spector.
Stronger interest rate hike
She therefore continues to believe that the Swedish Central Bank will raise the key interest rate in September.
Today’s figures reinforce that picture, she says.
The largest price changes on an annual basis are seen in the transport sector and in food. Compared to April 2025, transport prices rose by 6.0 percent. Food prices went in the opposite direction, falling by 6.3 percent – an effect of the reduction in VAT on food.
