Swedish Consumer Prices Unexpectedly Climb as Krona Weakened
Sweden’s consumer prices unexpectedly rose in July from a year earlier after the krona weakened.
Consumer prices rose an annual 0.1 percent after declining 0.1 percent the previous month, Statistics Sweden said today. Prices were estimated to remain unchanged, according to a Bloomberg survey of 14 economists. They fell 0.1 percent in the month. Adjusted for mortgages, price gains accelerated to an annual 1.2 percent from 0.9 percent. They fell a monthly 0.1 percent by that measure.
Sweden’s central bank last month said it will keep its main lending rate at 1 percent for at least another year to boost demand as a recession in Europe is fueling unemployment. Inflation will average 0.1 percent this year and 1.3 percent in 2014, it said. The Riksbank will announce its next two rate decisions on Sept. 5 and Oct. 24.
The krona slid for three months through June, before recovering 0.6 percent against the euro in July.
Sweden’s Finance MinisterAnders Borg last week said the country’s labor market will remain weak through 2014 as economic hurdles persist. He warned risks to Sweden’s export-reliant economy are “high” as the situation in Europe remains fragile.
“There’s still a challenging situation for the Swedish economy,” Borg said. “We must try to protect the economy and inject more energy.”
Sweden is vulnerable to developments abroad as it exports about half of its output. Some 70 percent of that goes to Europe which is in a recession.
To contact the reporter on this story: Johan Carlstrom in Stockholm at firstname.lastname@example.org.