PPI Suggests Potential For Further Disinflation In Core Goods CPI

Swedish December PPI signalled that further disinflation in core goods CPI is likely in the near-term, with the PPI ex-energy index disinflating to +1.4% Y/Y (vs +1.9% prior), the third consecutive monthly fall.

• Both consumer and capital goods annual inflation rates fell, but remain positive at +3.4% Y/Y (vs +4.1% prior) and +5.0% Y/Y (vs +5.9% prior). Swedish goods (ex-energy) CPI was 4.0% Y/Y in December, down from a peak of 9.4% Y/Y in December '22.
• However, ongoing tensions in the Red Sea could pose an upside risk to future PPI prints. We will look to see if these concerns are noted in the January PMI round.
• All pipeline prices reported in today's data (export prices, import prices and domestic supply) were deflationary in annual and monthly terms.
• The pace of deflation in Swedish headline PPI accelerated for the second consecutive month in December, to -7.7% Y/Y (vs -4.2% prior). There was no consensus for this release. The NSA monthly price change was -1.6% M/M (vs +1.4% prior).
• Producer prices on energy related products fell -37.6% Y/Y in December (vs -26.0% prior), while lower prices for crude oil and refined petroleum products were reported on the month.