SWEDEN: Unsurprising Uptick In Inflation Expectations in March
Swedish inflation expectations unsurprisingly accelerated in March, according to the latest Origo Survey, adjusting to the stronger-than-expected developments in spot inflation figures in Jan/Feb. Even so, the Riksbank will take note of a slight de-anchoring of longer term expectations at tomorrow's decision. The quarterly survey includes responses from labour market parties and purchasing managers, alongisde the usual money market participants.
- Overall, 1-year ahead CPIF expectations rose to 2.3% (vs 1.7% in the December quarterly survey), with smaller rises seen in 2-year (2.2% vs 1.9% in December) and 5-year (2.2% vs 2.0% prior) expectations.
- The largest increase in 1- and 2-year ahead expectations came from employer's organisations, while manufacturing purchasing managers saw the largest rise in 5-year ahead expectations.
- Relative to the February survey, money market CPIF expectations rose to 2.2% (vs 1.9% prior) at a one-year horizon, 2.1% (vs 2.0% prior) at a two-year horizon and 2.3% (vs 2.2% prior) at a five-year horizon.
1- and 2-year GDP growth expectations were notably higher than in December, perhaps adjusting to the recent step-change in the European fiscal outlook since the last survey.
There were no major increases in near-term nominal wage expectations, which will be an encouraging sign to the Riksbank in light of the recent acceleration of inflationary pressures.