In Sweden the main event is May inflation data that will be released Tuesday, at 09:30 CET. Our view is that May inflation will reconnect to the Riksbank's latest forecast, but that it will gradually start to undershoot thereafter. Hence, our forecasts offer no respite for the Riksbank or for those expecting that the next step will be some kind of tightening.
We expect the price level to fall by 0.1 percentage points in May, regardless of whether you look at CPI, CPIF or CPIF excluding energy. It means that the inflation rate for CPI, CPIF and CPIF excluding energy will drop by 0.4, 0.3 and 0.3 percentage points, respectively. This means, in turn, that our forecasts for CPI and CPIF excluding energy end up the same as the Riksbank's forecast, while the CPIF ends a 10th of a percentage point below.
In Norway , the week's key release is the Norges Bank's regional network survey, which has proved a good leading indicator of actual GDP growth.
The GDP figures for Q1 and revised data for Q4 16 revealed that growth has been somewhat stronger than Norges Bank anticipated in the March monetary policy report. Further improvement in the regional network would therefore mean that the bank has to revise up its growth forecast for 2017.
We expect the aggregated output index for the next six months to climb from 1.02 in the previous survey to 1.2, equivalent to mainland GDP growth of around 0.6% q/q for the next two quarters.
In Denmark , Monday brings inflation figures for May. April saw inflation climb to its highest for more than four years, but we do not estimate a further rise and predict a rate of 0.0% m/m and 0.9% y/y.
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