Inflation blamed on Beyonce concerts

In May, Swedish inflation dropped below 10 percent, according to official statistics released on Wednesday. Consumer prices increased by 9.7 percent year-on-year, marking the first time in over six months that inflation came in below 10 percent, down from April’s 10.5 percent. The decrease in inflation was primarily driven by lower electricity and food prices, as stated by Mikael Nordin, a statistician at Statistics Sweden.

Despite the overall decline in inflation, the costs of specific goods and services saw unexpected increases. The agency noted that prices for hotel and restaurant visits, recreational services, and clothing rose during this period. Analysts, including Michael Grahn, chief economist for Sweden at Danske Bank, suggested that the start of Beyoncé’s world tour in Sweden in May may have influenced the inflation rate. Grahn indicated that the concerts likely contributed to the increase in hotel and restaurant prices by approximately 0.2 percentage points.

In recent months, Swedish inflation has experienced fluctuations, reaching a peak of 12.3 percent in December, which was the highest in over 30 years. Although it slightly slowed to 11.7 percent in January, inflation unexpectedly rose back to 12 percent in February. In response, Sweden’s central bank, the Riksbank, has raised its guiding interest rate multiple times in an attempt to curb inflation. With the rate already at 3.5 percent since late April, the Riksbank has indicated the possibility of raising it by another quarter-point in either June or September.

The Riksbank utilises the inflation figure adjusted for fixed interest rates (CPIF) to guide its monetary policy. In May, CPIF stood at 6.7 percent, compared to April’s 7.6 percent. Looking ahead, the central bank forecasts a contraction of 0.7 percent for the Swedish economy in 2023, along with unadjusted inflation of 8.9 percent and a rise in unemployment. These projections reflect the bank’s expectations for the country’s economic performance in the coming year.