Sell-side Views Ahead of Thursday's CPI (2/2)

Ahead of Sweden's August CPI released tomorrow, the CPIF consensus is seen at 4.9% Y/Y, while the CPIF ex-energy consensus is stronger than the Riksbank at 7.4% Y/Y.

Below is a summary of the sell-side views we have seen, where analysts point to base effects from electricity as the key disinflation force this month:

SEB: Expect August CPIF to fall to 4.9% Y/Y and CPIF ex-energy to fall to 7.3% Y/Y.

• "Parts of the slowdown is explained by the weight effect from international travel prices," while the downturn in food, energy and other goods is expected to continue as with the last 2-3 months. The slowdown in services inflation is expected to be very gradual.
• Pricing plans have edged higher in sentiment indices and the weak krona has pushed PPI on consumer goods higher in June and July, meaning SEB's near-term CPIF ex-energy forecast has increased.

Handelsbanken: Expect CPIF to fall to 5.0% and CPIF ex-energy to fall to 7.5% Y/Y.

• Large base effects will push electricity prices down in August (expected at -36% Y/Y).
• Underlying inflation will remain high, with forward looking sentiment indicators ticking up, unit labour costs rising and the weak krona not offsetting slightly cooler producer prices.

• "Details suggest clothing, car fuel, hotel/restaurants and other goods and services together will add 0.4 p.p. to the monthly increase in CPIF while transportation services and recreation will subtract the same amount."
• "Travel market data seems to suggest there has been a sharp fall in foreign airline tickets in August, hence, there may be a slight downside to DB's forecasts for these two components."

• Base effects will pull headline lower, stemming mainly from electricity prices but to some extent also from prices for other goods.
• Foreign travel is also pulling down inflation due to a tripled weighting in the basket for 2023. Food prices are expected to be largely unchanged, while services are expected to remain sticky, partly due to higher congestion charges in August vs July.