Inflation is still very low in Sweden, new figures for September from Statistics Sweden show. And what contributed a lot to holding back inflation over the past month was food prices. And when it comes to that, Torbjörn Isaksson, chief analyst at Nordea, believes that the exchange rate of the Swedish krona has recorded.
– As for food prices, the krona has strengthened this year and I suspect that it is a contributing factor to food prices falling.
When the Swedish krona becomes stronger, it becomes cheaper to buy food from other countries and then the prices of imported food can also be reduced in the Swedish grocery stores. What also contributed to low inflation in September was that airline charter prices fell sharply.
If you look at the price development over the past year, the so-called inflation rate, it has been a little higher than analysts’ expectations in recent months. But for September, it was the opposite when inflation fell from 0.7 percent to 0.3.
– Inflation has been hopeful this year and continues to be so and this time it came in lower than expected, says Torbjörn Isaksson.
The main reason for the fall in inflation in September was lower prices for electricity and petrol and diesel compared with a year ago.
Torbjörn Isaksson believes that Inflation will remain low in the near future and despite the fact that today’s inflation figure of 0.3 per cent is far from the Riksbank’s target of two per cent inflation, he believes that most indications are that there will be no interest rate cut in an attempt to speed things up. inflation.
– The Riksbank has been clear that it does not intend to change monetary policy in the near future. You are still in a crisis situation and have your eyes on the effects of the pandemic. And we believe that the Riksbank will leave monetary policy unchanged for the foreseeable future. But given the low inflation, an interest rate cut or other stimulus measures cannot be completely ruled out. Should it still happen, it will take a while until next year.
Source: ICELAND NEWS