The pace of inflation slowed in Sweden in May, figures from the Statistics Office showed on Thursday, despite production bottlenecks and supply issues that have boosted price pressures across the globe.
Consumer prices in Sweden, measured with a fixed interest rate, rose 0.2 percent in May from the previous month and were up 2.1 percent from the same month last year.
The central bank targets 2 percent CPIF inflation.
The Riksbank had forecast headline inflation of 1.88% against a year earlier. Analysts had forecast inflation of 2.2%.
Inflation hit 2.5% in April and the Riksbank believes that inflation has peaked. But there are increasing signs of global price pressures building, with shortages of input goods, transport bottlenecks and tight labour markets in some countries.
Prices for timber, for example, have risen around 50% in Sweden since autumn last year, according to Danske Bank.
Speaking on Wednesday, however, Governor Stefan Ingves dismissed concerns that higher inflation could lead to tighter monetary policy, saying that underlying price pressures remained muted.
Ingves is not alone. U.S. Federal Reserve Chair Jerome Powell has repeatedly stated that higher inflation will be transitory, while the Fed has signaled it could tolerate higher inflation for some time.
U.S. inflation figures are due later in the day with CPI forecast to have accelerated to 4.7% in May from a 4.2% in April.
Inflation has not just surged in the United States.
In May, inflation in the 19 countries sharing the euro topped the European Central Bank’s target of below but close to 2%.
Photo: The Swedish Parliament, Riksdagen in Stockholm, Sweden.