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14 Jun 2013
Flash: Nordic countries face subdued inflationary pressures – Goldman Sachs
FXstreet.com (New York) - Inflation in Sweden and Norway remains around 1ppt-1.5ppt below the Riksbank’s and Norges Bank’s respective inflation targets.
However, according to the Economics Research Team at Goldman Sachs, “Low imported inflation has been a key driver of the recent below-target aggregate inflation rates in Scandinavia, while domestic inflation in Sweden and Norway is running closer to the central banks’ targets.”
Recent declines in external inflation add downward pressure
Inflation has been low in many developed economies so far in 2013 and we recently lowered our Euro area inflation forecast for next year. We are also marking down our medium-term inflation forecast for Scandinavia: we now expect inflation to rise at a slower rate and not to reach 2% until early 2016, later than currently forecast by the Riksbank and Norges Bank. “We have extended by two quarters, to mid-2014, the period over which we expect both central banks to remain on hold. Equally, however, we do not expect either central bank to respond to lower-than-expected inflation by cutting rates in the near-term.” the team adds.
However, according to the Economics Research Team at Goldman Sachs, “Low imported inflation has been a key driver of the recent below-target aggregate inflation rates in Scandinavia, while domestic inflation in Sweden and Norway is running closer to the central banks’ targets.”
Recent declines in external inflation add downward pressure
Inflation has been low in many developed economies so far in 2013 and we recently lowered our Euro area inflation forecast for next year. We are also marking down our medium-term inflation forecast for Scandinavia: we now expect inflation to rise at a slower rate and not to reach 2% until early 2016, later than currently forecast by the Riksbank and Norges Bank. “We have extended by two quarters, to mid-2014, the period over which we expect both central banks to remain on hold. Equally, however, we do not expect either central bank to respond to lower-than-expected inflation by cutting rates in the near-term.” the team adds.