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Prospera Survey Indicates Well Anchored Inflation Expectations; Recovery In Activity

SWEDEN
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Swedish quarterly CPIF inflation expectations moderated notably compared to the March survey, with 1-year ahead expectations at 2.0% Y/Y (vs 2.4% prior), 2-year at 2.0% (vs 2.1% prior) and 5-year at 2.0% (vs 2.1% prior).

  • The data confirms that inflation expectations remain well-anchored around the 2% target, while activity and real wages should continue to recover in the next few years.
  • The quarterly survey interviews employee/employer organisations and purchasing managers alongside the usual money market participants, thus providing a broader measure of expectations in Sweden.
  • Participants across groups saw future inflation at the same level or lower at 1/2/5-year horizons, compared to their respective previous responses.
  • Elsewhere, annual GDP expectations were revised higher at 1-year and 2-year horizons (a reminder that Q1 GDP was stronger than expected at 0.7% Q/Q) to 1.2% Y/Y 1-year ahead (vs 0.7% prior) and 2.1% 2-years ahead (vs 1.9% prior). 5-year ahead GDP growth was seen at 2.2% Y/Y (vs 2.3% prior).
  • Wage growth expectations remained “responsible” (as described by Riksbank Executive Board members), at 3.3% Y/Y in 1 year (vs 3.4% prior), 3.1% in 2 years (vs 3.1% prior) and 2.9% in 5 years (vs 2.8% prior).
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Swedish quarterly CPIF inflation expectations moderated notably compared to the March survey, with 1-year ahead expectations at 2.0% Y/Y (vs 2.4% prior), 2-year at 2.0% (vs 2.1% prior) and 5-year at 2.0% (vs 2.1% prior).

  • The data confirms that inflation expectations remain well-anchored around the 2% target, while activity and real wages should continue to recover in the next few years.
  • The quarterly survey interviews employee/employer organisations and purchasing managers alongside the usual money market participants, thus providing a broader measure of expectations in Sweden.
  • Participants across groups saw future inflation at the same level or lower at 1/2/5-year horizons, compared to their respective previous responses.
  • Elsewhere, annual GDP expectations were revised higher at 1-year and 2-year horizons (a reminder that Q1 GDP was stronger than expected at 0.7% Q/Q) to 1.2% Y/Y 1-year ahead (vs 0.7% prior) and 2.1% 2-years ahead (vs 1.9% prior). 5-year ahead GDP growth was seen at 2.2% Y/Y (vs 2.3% prior).
  • Wage growth expectations remained “responsible” (as described by Riksbank Executive Board members), at 3.3% Y/Y in 1 year (vs 3.4% prior), 3.1% in 2 years (vs 3.1% prior) and 2.9% in 5 years (vs 2.8% prior).