The pace of inflation in Sweden slowed in February amid tighter COVID-19 restrictions, data showed on Monday, indicating price pressures are likely to remain restrained for some time to come.
Consumer prices in Sweden, measured with a fixed interest rate, rose 0.3 percent in February from the previous month and were up 1.5 percent from the same month last year, the statistics office (SCB) said on Monday.
The outcome for headline CPIF inflation, which strips out mortgage costs, was well below the Riksbank’s forecast of 1.98%.
Analysts had seen headline inflation compared with a year earlier at 1.8%, a faster pace than the 1.7% from January.
“All in all, inflation figures remain difficult to interpret, but the February readings show that the underlying cost pressures are low,” Nordea economist Torbjorn Isaksson said in a note.
“Bottlenecks in global supply chains of goods could give an boost to inflation in the coming months, but any uptick should be temporary.”
Despite apparently tame inflation, however, there is a growing worry that central banks are underestimating the risks of a rapid pick up in prices when economic recovery becomes entrenched and pent up demand is released.
Bank of England Chief Economist Andy Haldane warned last month that there was a risk that inflation could overshoot and stay above target for a while, possibly causing tighter monetary policy that would hit growth just as economies pick up speed again.
Bond yields have risen in recent weeks, forcing the European Central Bank at its most recent meeting to accelerate money-printing to keep a lid on euro zone borrowing costs.
The Riksbank forecasts that inflation will average 1.5% this year and does not expect price increases to stabilize around its target of 2% until 2023.