In January, annual inflation accelerated somewhat due to less generous energy support package from the government compared to one year ago and because of a larger share of the housing component in the consumer basket this year after the yearly adjustment of the consumption basket’s composition. In January, prices grew by 18.6% in a year and 0.8% in a month.
Compared to December, the prices of communication services and food increased the most. Alcohol and tobacco also became more expensive. On January 1, the excise duty on tobacco increased and the excise duty exemption for tobacco liquids ended. Compared to December, the prices of clothing and footwear decreased because of winter sales. However, discounts were smaller than a year earlier. Compared to December, the prices of motor fuels also decreased. There is enough oil and oil products on the market, despite additional sanctions on Russia.
Price increases will become smaller in the second half of the year. Declining economic activity, falling household purchasing power and rising unemployment reduce demand for various goods and services. The decrease in energy prices also helps. In January, electricity and gas stock prices were significantly lower than a year earlier. According to Swedbank, prices will rise by 9 percent in 2023.