Inflation is central to understanding Sweden’s economic trajectory—with impacts on households, businesses, monetary policy, and currency. Sweden CPI May 2025 data from Statistics Sweden (SCB) reveals that consumer prices (CPI) and underlying inflation measures continued to ease, reinforcing assumptions of subdued price pressure in the economy. In this report, we break down the latest CPI results, compare with CPIF (the central bank’s preferred measure), analyze cost drivers, and explore implications for the Riksbank, consumers, and financial markets.
Sweden May CPI & CPIF Snapshot
- Headline CPI: Rose by 0.1% month-over-month and by just 0.2% year-over-year in May 2025.
- CPIF (CPI with fixed interest rate): Also up 0.1% month-over-month, with annual inflation at 2.3%—unchanged from April.
- CPIF excluding energy: Increased by 0.2% month-over-month, with annual rate at 2.5%, down from 3.1% in April.
These values came in below analyst forecasts (headline and ex-energy inflation were expected at ~2.5% annually).
What’s Behind These Numbers?
a) Soft Energy Prices
With energy price volatility removed, headline CPI remains very subdued. The keeping of monthly inflation at just +0.1% indicates minimal upward pressure from the energy sector.
b) Sticky Core Inflation
Despite energy softness, core CPI (CPIF-XE) at 2.5% shows underlying price pressures remain moderate, though easing from April’s peak. This suggests a gradual normalization after earlier spikes.
c) Housing & Owner Costs
CPI remains low partly because mortgage interest rates are fixed in CPIF. However, rents and other housing inputs continue to contribute to underlying inflation—especially visible in core measures.
d) Food Prices
Earlier public concern and protests over food price inflation have quieted slightly. The CPI annual rate of 0.2% largely reflects moderating food inflation, while CPIF trends reinforce controlled pricing.
Comparison with April & Historical Trend
- May headline CPI (0.2% yearly) marks the lowest reading since early 2025. In April, CPI was at 0.3% and CPIF at 2.3%.
- April’s CPIF-XE was 3.1%, versus May’s 2.5%, signaling notable easing in non-energy inflation .
- Calendar‑based CPI volatility earlier in 2025—like the January blip (+1.0%)—has settled into low single‑digit territory .
Impact on the Riksbank
The Riksbank targets 2% inflation (CPIF basis). With May’s figure at 2.3% and underlying inflation cooling, the central bank has room to consider policy easing.
- In May, the Riksbank kept its key rate at 2.25%, citing weak economic output and persistent—but easing—inflation.
- The May CPI reinforces expectations that a rate cut by mid‑June (18th) is likely, provided inflation remains benign.
Wider Economic Context
a) Weak Economic Growth
Sweden’s economy contracted slightly in Q1 2025 (–0.2% QoQ), with household spending and investment softening amid trade uncertainties.
Headline CPIF trends support a dovish approach, aligning with signs of prudent moderating demand.
b) Forecasted Inflation Path
European Commission forecasts expect inflation to hover just above 2% through 2025 before moderating further in 2026, aided by supply factors and weak wage growth.
Implications for Stakeholders
Consumers & Households
- Cost of living relief: With monthly CPI flat and annual inflation near zero, consumer purchasing power improves—helped by earlier wage gains.
- Food prices: Still somewhat elevated, but CPI data suggests moderation, easing collective discontent.
Businesses
- Pricing flexibility: Slowing inflation allows companies to maintain tighter price discipline—the flip side of margin pressure.
- Borrowing conditions: Anticipated Riksbank rate cuts may ease financing costs for SMEs, pending credit environment stability.
Financial Markets
- Fixed income: Lower-than-expected inflation strengthens yields outlook, potentially decoupling short-end rates.
- Forex: A dovish Riksbank could weaken SEK in the short term—especially if global peers maintain tighter stances.
Riksbank Policy
With inflation falling steadily, the central bank is likely to:
- Hold rates steady in June.
- Cut by 25 bps in July or August—depending on CPI, GDP, and wage signals.
- Monitor CPI and CPIF-XE closely in H2 2025 before further adjustments.
Risks & Watchpoints
- Energy volatility: A sudden rise in global oil or electricity prices could spike inflation unexpectedly.
- Wage inflation: If wage settlements exceed 3.5%, inflation may reaccelerate.
- External shocks: Global trade disruptions or supply chain shocks may reapply price pressure.
- Statistical revisions: Final detailed CPI data (June 13) might alter interpretations of flash estimates.
Upcoming indicators to watch:
- June CPI & CPIF release (scheduled mid-June).
- GDP rebound in Q2.
- Private wage index updates and consumer spending trend surveys.
Outlook
- Short term: May CPI confirms a cooling cycle. Expect headline inflation near 0.1% MoM in June; CPIF annual rate between 2.0–2.3%.
- Medium term: Gradual convergence toward the Riksbank’s 2% target. Underlying inflation trending lower supports a cautious, gradual rate-cut path.
Conclusion
May 2025 inflation data for Sweden shows consumer prices stabilizing: CPI at +0.2% YoY, CPIF steady at 2.3%, and core inflation easing to 2.5%. The Riksbank, facing weak growth and softening price pressure, is likely to move towards rate cuts—potentially as early as June or July. For consumers, businesses, and markets, these dynamics signal easing cost pressures and potential policy relief ahead.
