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Inflation Stabilized: KPIF Remains at 2.3% in April 2025
The latest inflation report from SCB shows that inflation according to KPIF (Consumer Price Index with fixed interest) remains at 2.3% for April 2025. This marks a stabilization of inflation after a period of fluctuations over the past year. At the same time, the CPI inflation is reported at 0.3%, indicating a continued low rate of price increases for consumers.
Central Bank's Decision and Economic Forecasts
With KPIF stabilizing at 2.3% and CPI at 0.3%, the Central Bank faces an important decision regarding the repo rate, which is currently at 2.25%. The recent stability in inflation figures may give the Central Bank reason to keep the rate unchanged, especially considering the previous decrease from 2.5% in January 2025.
Economic experts predict that the Central Bank may choose to maintain the current interest rate level to ensure continued economic stability. This could mean that interest rates remain relatively low, which is good news for borrowers.
Effects on Mortgages and Personal Loans
With the current repo rate at 2.25% and an assumed bank margin of 1%, borrowers can expect the following interest rates on their mortgages:
- Mortgage of 1 million kronor: 3.25%
- Mortgage of 3 million kronor: 3.25%
- Mortgage of 5 million kronor: 3.25%
For a mortgage of 1 million kronor, this results in a monthly cost of approximately 2,708 kronor, while a loan of 3 million kronor would cost about 8,125 kronor per month. For a loan of 5 million kronor, the monthly cost would be around 13,542 kronor. These calculations are based on a repayment period of 30 years.
Personal loans are also affected by the stable interest rate level, meaning consumers can expect continued favorable terms for their loans.
Food Prices, Fuel Prices, and Energy Prices
The stable inflation may provide some relief for households' finances. Food prices, which are often influenced by inflation, are expected to remain stable in the short term. However, fuel prices and energy prices may still be affected by external factors such as global oil markets and political decisions, making them harder to predict.
Historical Perspectives and Future Expectations
Looking back over the past two years, KPIF inflation has varied significantly, from a high of 6.7% in May 2023 to today's 2.3%. This decline reflects effective monetary policy and a recovery from previous economic shocks. With the current stability in inflation, we can expect the Central Bank to continue acting cautiously to maintain this balance.
In summary, while the current inflation level indicates a stabilization of the economy, the Central Bank's future decisions will play a crucial role in shaping the economic conditions for both consumers and businesses moving forward.
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