Sweden's Inflation Trends in August 2025: Rising Prices and Core Inflation Declines

Recent inflation data for August 2025 has revealed unexpected trends in Sweden's economy, showing rising overall inflation alongside a decline in core inflation. Preliminary figures from Statistiska centralbyrån indicate that the overall inflation rate rose to about 1.1%, while the key inflation measure, known as KPIF, jumped to 3.3%, surpassing predictions of 3.2% by analysts.

However, the core inflation, which excludes volatile energy prices, decreased to 2.9%, dropping from the previous month’s rate of 3.2%. This reflects a notable shift, suggesting that while consumer prices are rising, the undercurrents of inflation, excluding energy costs, are easing. The divergence in these figures indicates a complex economic environment, affected by recent unexpected spikes in food and travel prices and sustained high electricity costs.

Carl Johan von Seth, an economic analyst, highlighted that the rise in inflation rates could complicate decisions by the Riksbanken (Swedish central bank) regarding interest rates, currently set at 2%. The bank is under pressure from rising costs but is also cautious due to inflation volatility. A significant factor in their deliberations will be the government’s upcoming budget, which is projected to feature 80 billion kronor in unpaid expenses for next year. The next interest rate decision is anticipated on September 23, which will be closely monitored by market watchers.

As economic conditions develop, the implications for monetary policy remain uncertain, with the Riksbanken indicating that “the door is not closed” to potential interest rate cuts. The ongoing fluctuation in inflation may prompt the bank to take a more cautious approach before making definitive adjustments.