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INFLATION

Swedish prices deflate due to cheap vacations

Cheaper holiday packages sent Sweden’s consumer prices sliding further in August, according to new statistics released on Thursday.

Swedish prices deflate due to cheap vacations

This was the fifth month running of falling consumer prices in Sweden. Statistics Sweden, which published the data, said the main reason for the drop was an 8.2 percent fall in the cost of package holidays.

Swedish prices fell by 0.8 percent on a 12-month basis in August, Statistics Sweden said in a statement, after dropping by 0.9 percent in July.

The statistics office also said from July to August, prices increased by 0.2 percent.

The Swedish economy was hit by consecutive months of rising prices last year, peaking at a 4.4 percent increase in September.

Deflation can hit economic growth because it reduces businesses profits and discourages investment.

It also leads consumers to put off buying goods in the hope that prices will continue to fall.

Sweden’s central bank forecasts that prices will drop 0.3 percent this year and rise by 1.2 percent in 2010.

In Norway, inflation in August slowed to 1.9 percent, compared to 2.2 percent the previous month.

Statistics Norway said a drop in the cost of electricity bills was one of the key drivers behind the fall in consumer prices.

But core inflation, excluding energy and tax variations and the measure used by the central bank in setting its monetary policy, increased from 2.3 percent in July to 2.5 percent.

In Denmark, consumer prices rose 1.1 percent on a 12-month basis owing to a rise in the cost of clothing and transport in August, after a rise of 1.0 percent in July, according to data from the official Danish statistics agency.

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ECONOMY

Spain’s inflation soars to 29-year high

Spanish inflation accelerated in November to its highest level in nearly three decades on the back of rising food and gas prices, official data showed Monday.

black friday spain
Black Friday sales can't disguise the fact for shoppers that life in Spain is getting increasingly expensive. Photo: GABRIEL BOUYS / AFP

Consumer prices jumped by 5.6 percent, up from a 5.4 percent increase in October, according to preliminary figures from national statistics institute.

That is its fastest pace since September 1992, when the rate was 5.8 percent.

The surge in inflation in the eurozone’s fourth-largest economy was due largely to a spike in food prices, followed by higher gas prices, the statistics office said.

Electricity costs, however, declined slightly after a month-long acceleration, it added.

As in other European Union nations, inflation in Spain has risen since the start of the year after consumer prices declined during most of 2020 due to the economic impact of pandemic lockdowns.

In October, eurozone inflation reached 4.1 percent, well above the European Central Bank’s target of two percent and equal to a high set in July 2008.

But the bank believes eurozone inflation will peak in November and is set to gradually slow next year as supply bottlenecks and the energy crunch ease, board member Isabel Schnabel said earlier this month.

Investors worry central banks will withdraw their stimulus measures sooner than expected to tame inflation.

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