Sweden: Upside surprise in core inflation, May GDP strong

Research evidence excerpt

Sweden: Upside surprise in core inflation, May GDP strong

J P M O R G A N Europe Economic Research

08 July 2026

Sweden: Upside surprise in core

inflation, May GDP strong

• Core inflation remains low, but the flash came in a tenth firmer than Economic and Policy Research

expectations in June Allan Monks

• GDP for May also surprised positively, and along with a firm June PMI tilt (44-20)allan.j.monks@jpmorgan.com7134-8309

growth risks to the upside J.P. Morgan Securities plc

• It is unclear whether the latest rise in energy prices will be sustained

• But the latest data and developments are likely to reinforce the Riksbank’s

tightening bias, if sustained

In the flash release, headline CPIF inflation declined from 1.5% to 1.3%oya in

June (JPMorgan & Consensus 1.2%). A decline had been expected on the basis of

falling fuel prices, but an upside surprise came from core inflation, which declined

a tenth less than expected from 0.5% to 0.4%oya. Based on our seasonal

adjustment, we estimate that core prices rose 0.3%m/m in June.

The surprise on core came from services inflation, which accelerated from 2.6%

to 2.9%oya. Its possible that airfares or package holidays turned out stronger than

expected in the month, and hence that the underlying was better behaved. But at

this stage with only the flash, those details are not available. Goods inflation

decelerated from, -0.7% to -1.5%oya.

Fiscal changes are estimated to be weighing on inflation by up to a percentage

point. The underlying inflation picture is hence firmer than suggested by both the

current headline and core inflation data. Past currency strength has also been

weighing on inflation, but weakening so far this year should help to alleviate that

drag in the months ahead.