Sweden’s December 2025 CPI Release: A Moderating Inflation Pulse
Table of Contents
Sweden’s Consumer Price Index (CPI) for December 2025, released on December 4, showed a 0.30% month-on-month increase, significantly below the 0.60% consensus forecast and down from 0.90% in November. This marks a notable deceleration in inflation momentum, consistent with a broader cooling trend observed since mid-2025. The data, sourced from the Sigmanomics database, reflects a complex interplay of domestic demand, energy prices, and external shocks.
Geographic & Temporal Scope
The report covers Sweden’s national CPI data for December 2025, with historical context reaching back to July 2025. The monthly inflation rate has fluctuated between -0.40% and 0.90% over the past six months, with the latest reading signaling a return to moderate inflation territory. This temporal window captures the post-pandemic recovery phase and the impact of recent monetary tightening.
Core Macroeconomic Indicators
- December CPI MoM: 0.30% (actual) vs. 0.60% (estimate), down from 0.90% in November
- YoY inflation rate trending downwards, estimated near 2.50%, compared to 3.10% six months ago
- Core inflation (ex-food and energy) remains elevated around 2.80% YoY, showing stickiness
- Unemployment steady at 6.20%, indicating moderate labor market slack
- GDP growth forecast revised to 1.20% for 2025, down from 1.50% earlier in the year
Monetary Policy & Financial Conditions
The Swedish Riksbank has maintained a cautious stance, keeping the policy rate at 3.50% after a series of hikes earlier in 2025. The softer CPI print reduces immediate pressure for further tightening but does not eliminate the risk. Financial conditions remain moderately tight, with 2-year government bond yields falling from 3.80% to 3.40% post-release. The Swedish krona (SEK) appreciated 0.40% against the euro in the first hour, reflecting market relief.
Sweden’s inflation dynamics continue to be shaped by a mix of domestic and external factors. The latest CPI data confirms a slowdown in headline inflation, driven primarily by energy price normalization and easing supply chain bottlenecks.
Fiscal Policy & Government Budget
The government’s fiscal stance remains moderately expansionary, with a 2025 budget deficit projected at 1.80% of GDP, slightly higher than the 1.50% forecast in mid-year. Increased social spending and infrastructure investments support domestic demand but risk adding inflationary pressures if growth accelerates unexpectedly.
External Shocks & Geopolitical Risks
- Energy prices have stabilized after volatile swings in Q3 2025, reducing headline inflation volatility.
- Geopolitical tensions in Eastern Europe and supply chain disruptions remain downside risks.
- Global inflation trends are moderating, but uneven recovery in major trading partners could affect export demand.
Financial Markets & Sentiment
Market sentiment post-CPI release was cautiously optimistic. The SEK’s appreciation and falling bond yields suggest investors are pricing in a slower pace of rate hikes. Equity markets showed mild gains, with the OMX Stockholm 30 index up 0.50%. Volatility indices remain subdued, indicating a stable risk environment for now.
Structural & Long-Run Trends
Long-term inflation expectations remain anchored near the Riksbank’s 2% target, supported by credible monetary policy frameworks. However, structural factors such as aging demographics and technological shifts continue to exert downward pressure on inflation. Housing costs and wage growth remain key variables to monitor for future inflation trajectories.
Drivers this month
- Shelter costs: 0.18 pp contribution, reflecting steady housing demand
- Energy prices: -0.20 pp, due to lower electricity and fuel costs
- Food prices: -0.10 pp, as supply chain issues ease
- Used cars: -0.05 pp, continuing a mild deflation trend
Policy pulse
The CPI reading remains above the Riksbank’s 2% inflation target but shows a clear deceleration. This suggests the current monetary policy stance is beginning to temper inflation without triggering a sharp economic slowdown. The central bank is likely to maintain a data-dependent approach in early 2026.
Market lens
Immediate reaction: SEK/USD strengthened by 0.40%, 2-year yields dropped 40 basis points, and equity markets gained 0.50%. This reflects market confidence in a soft landing scenario with contained inflation risks.
This chart highlights a clear inflection point in Sweden’s inflation trajectory. The downward trend in headline CPI, combined with sticky core inflation, suggests a gradual normalization phase. Market pricing now favors a pause in rate hikes, with upside risks from wage growth and fiscal expansion balanced by easing energy costs.
Looking ahead, Sweden’s inflation outlook is shaped by several competing forces. The base case anticipates continued moderation in headline inflation, with core inflation easing slowly as monetary policy effects deepen.
Bullish Scenario (20% probability)
- Inflation falls below 2% YoY by mid-2026
- Monetary policy loosens in H2 2026 due to sustained disinflation
- SEK strengthens further, supporting import price stability
Base Scenario (60% probability)
- Headline inflation stabilizes around 2.30% YoY through 2026
- Riksbank maintains current rates, with limited hikes
- Moderate GDP growth of 1.00–1.30%, steady labor market
Bearish Scenario (20% probability)
- Inflation rebounds above 3% YoY due to wage pressures
- Further rate hikes required, risking economic slowdown
- Geopolitical shocks disrupt supply chains, pushing prices higher
Risks remain balanced but skewed slightly to the upside given wage dynamics and fiscal stimulus. The Sigmanomics database methodology integrates monthly CPI data with macroeconomic indicators and market sentiment to provide a comprehensive inflation outlook.
Sweden’s December CPI print signals a meaningful easing in inflation pressures, offering some relief to policymakers and markets. While core inflation remains elevated, the overall trend points to a gradual return to price stability. The Riksbank’s cautious approach appears justified, balancing inflation control with growth support.
External risks, including geopolitical tensions and global economic uncertainty, warrant close monitoring. Financial markets have responded positively but remain sensitive to new data. Structural factors such as demographics and housing costs will continue to shape Sweden’s inflation path over the medium term.
Investors and policymakers should prepare for a nuanced environment where inflation moderates but does not collapse, requiring flexible and data-driven responses.
Key Markets Likely to React to CPI
Sweden’s CPI data is a critical driver for several asset classes. The Swedish krona (SEKEUR) typically reacts strongly to inflation surprises, influencing currency markets. Domestic equities, represented by OMXS30, are sensitive to inflation and interest rate expectations. Fixed income markets, especially 2-year government bonds (SE2Y), track inflation trends closely. Additionally, global commodities like Brent crude oil (UKOIL) impact inflation via energy costs. Lastly, Bitcoin (BTCUSD) often moves inversely to inflation fears, serving as a speculative hedge.
- SEKEUR – SEK’s exchange rate vs. EUR, sensitive to inflation and monetary policy.
- OMXS30 – Sweden’s main equity index, impacted by inflation-driven rate changes.
- SE2Y – Swedish 2-year government bond yields, closely tied to inflation expectations.
- UKOIL – Brent crude oil prices, a key input to energy inflation.
- BTCUSD – Bitcoin, often viewed as an inflation hedge or risk asset.
Indicator vs. SEKEUR Since 2020
A mini-chart analysis shows a strong inverse correlation between Sweden’s YoY CPI and SEKEUR exchange rate since 2020. Periods of rising inflation coincide with SEK depreciation against the euro, reflecting monetary tightening expectations. The recent CPI slowdown has supported SEK appreciation, consistent with the December 2025 data.
FAQs
- What does the latest Sweden CPI report indicate?
- The December 2025 CPI shows a slowdown to 0.30% MoM, signaling easing inflation pressures but persistent core inflation.
- How does Sweden’s CPI affect monetary policy?
- The softer inflation print reduces immediate pressure for rate hikes but keeps the Riksbank cautious amid sticky core inflation.
- Why is Sweden’s CPI important for investors?
- Sweden’s CPI influences currency, bond, and equity markets by shaping expectations for interest rates and economic growth.
Takeaway: Sweden’s December CPI print marks a turning point toward moderate inflation, supporting a cautious but steady monetary policy path in 2026.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.









The December 2025 CPI print of 0.30% MoM is a marked slowdown from November’s 0.90% and below the 12-month average of 0.50%. This deceleration is primarily driven by a 0.20 percentage point contribution from energy price stabilization and a 0.10 percentage point decline in food inflation. Core inflation components, including shelter and services, contributed 0.18 and 0.12 percentage points respectively, indicating persistent underlying price pressures.
Headline inflation is trending downward, reversing a two-month acceleration phase seen in September and October. The 12-month average CPI growth now stands at 2.70%, down from 3.10% three months ago, signaling a gradual easing of inflationary pressures.