The latest CPIF (Consumer Price Index with fixed interest rate) inflation reading for Sweden, released on December 4, 2025, shows a year-on-year increase of 2.30%, down from 3.10% in November and well below the 2.50% consensus forecast, according to the Sigmanomics database. This marks the lowest inflation rate since July 2025, when CPIF stood at 2.80%. The easing reflects a combination of softer energy prices and moderating demand pressures amid a complex macroeconomic backdrop.

Drivers this month

• Shelter costs contributed 0.15 percentage points (pp), down from 0.25 pp last month.
• Energy prices declined by 4.50% MoM, subtracting roughly 0.30 pp from headline inflation.
• Food inflation remained stable at 3.20% YoY, maintaining upward pressure.
• Used car prices fell by 0.10 pp, reflecting weaker consumer demand.

Policy pulse

The 2.30% CPIF YoY remains above the Riksbank’s 2% inflation target but signals a clear deceleration from the 3.10% peak in September and October. This easing may reduce immediate pressure on the central bank to hike rates aggressively, though core inflation persistence suggests a cautious stance remains warranted.

Market lens

Immediate reaction: The SEK/USD currency pair strengthened by 0.30% within the first hour post-release, reflecting relief at the softer inflation print. Swedish 2-year government bond yields declined by 5 basis points, signaling reduced expectations for near-term rate hikes.

Sweden’s CPIF inflation trend over the past six months shows a peak in early autumn followed by a steady decline. The 2.30% December reading contrasts with the 12-month average of 2.95%, underscoring a meaningful slowdown. This trend aligns with broader macroeconomic indicators signaling cooling demand and easing cost pressures.

Monetary Policy & Financial Conditions

The Riksbank has maintained a cautious tightening cycle, with the policy rate currently at 3.25%. Financial conditions have tightened as bond yields rose through Q3 and early Q4, but the recent inflation slowdown has softened market expectations for further hikes. Credit growth has slowed to 4.10% YoY, down from 5.30% six months ago, reflecting tighter lending standards and cautious borrower sentiment.

Fiscal Policy & Government Budget

Sweden’s fiscal stance remains moderately expansionary, with a 2025 budget deficit forecast of 0.80% of GDP. Government spending on social welfare and infrastructure continues to support domestic demand, partially offsetting inflation headwinds. However, rising debt servicing costs amid higher global rates pose medium-term risks.

External Shocks & Geopolitical Risks

Global energy price volatility and geopolitical tensions in Eastern Europe continue to influence inflation dynamics. The recent easing in energy prices partly reflects improved supply conditions but remains vulnerable to renewed shocks. Trade disruptions and supply chain uncertainties also weigh on cost structures.

Drivers this month

• Energy prices: -0.30 pp contribution, down from 0.40 pp in September.
• Shelter costs: 0.15 pp, down from 0.25 pp in November.
• Food prices: steady at 0.40 pp contribution.

Policy pulse

The deceleration in headline inflation reduces immediate pressure on the Riksbank but core inflation’s resilience suggests the central bank will maintain a vigilant stance. The current 3.25% policy rate may hold steady in the near term, with future hikes contingent on inflation persistence.

Market lens

Immediate reaction: Swedish krona (SEK) appreciated 0.30% against the USD, while 2-year government bond yields fell by 5 basis points, reflecting eased rate hike expectations.

Looking ahead, Sweden’s inflation trajectory will hinge on several key factors. The Riksbank’s policy decisions, global energy markets, and domestic demand conditions will shape the path of CPIF inflation in 2026.

Bullish scenario (20% probability)

Inflation falls below 2% by mid-2026 due to sustained energy price declines and weaker wage growth. The Riksbank pauses rate hikes, supporting growth and credit expansion. This scenario would boost consumer confidence and investment.

Base scenario (60% probability)

Inflation stabilizes around 2.20%-2.50% through 2026, with moderate core inflation persistence. The Riksbank maintains current rates, adjusting cautiously as data evolves. Growth remains moderate, supported by fiscal stimulus and stable external conditions.

Bearish scenario (20% probability)

Inflation rebounds above 3% due to renewed energy shocks or wage pressures. The Riksbank resumes aggressive tightening, risking slower growth and financial stress. This scenario could dampen consumer spending and increase borrowing costs.

Structural & Long-Run Trends

Sweden faces structural inflation challenges including housing supply constraints and labor market tightness. Demographic shifts and technological changes will also influence inflation dynamics over the medium term. Policymakers must balance short-term stabilization with long-run structural reforms.

Sweden’s December CPIF inflation print signals a welcome easing but does not eliminate inflation risks. The Riksbank’s next moves will be data-dependent, balancing inflation control with growth support amid global uncertainties. Market reactions suggest confidence in a soft landing, but vigilance remains essential.

Key Markets Likely to React to CPIF YoY

Sweden’s CPIF inflation data typically influences the SEK currency, local bond yields, and select equities sensitive to interest rates and consumer demand. Monitoring these markets provides insight into evolving inflation expectations and policy outlooks.

• SEKUSD – The Swedish krona’s exchange rate versus the US dollar closely tracks inflation surprises and monetary policy shifts.
• OMXS30 – Sweden’s benchmark equity index reacts to inflation-driven changes in consumer spending and corporate earnings.
• EURSEK – The euro to krona pair reflects cross-border capital flows influenced by inflation and rate differentials.
• ERIC-B.ST – Ericsson’s stock is sensitive to macroeconomic conditions and investment cycles affected by inflation.
• BTCUSD – Bitcoin’s price often reacts to inflation trends as an alternative store of value amid monetary policy shifts.

FAQ

What is the CPIF YoY inflation rate for Sweden?

The CPIF YoY inflation rate for Sweden in December 2025 was 2.30%, down from 3.10% in November.

How does the CPIF reading affect Sweden’s monetary policy?

The easing inflation reduces pressure on the Riksbank to hike rates aggressively but core inflation persistence keeps policy cautious.

What are the main risks to Sweden’s inflation outlook?

Risks include energy price volatility, wage pressures, and geopolitical shocks that could reverse the current inflation slowdown.

Takeaway: Sweden’s December CPIF inflation print signals a meaningful cooling trend, easing near-term monetary policy pressures but leaving core inflation risks intact. Policymakers and markets will closely monitor upcoming data for signs of sustained disinflation or renewed pressures.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.

Updated 12/4/25