A big problem that world governments are facing, as of now, is the growing rates of inflation. Some countries have rates that have reached as high as 54.8% (World Economic Forum); furthermore, this calculation is from the first quarter of 2022, meaning that inflation rates may have risen since then. Sweden, the focus of this article, also has its hands full dealing with the heightened costs of living that the average consumer faces.
As of September 14th, the rate of inflation in Sweden was calculated to be around 9.8%, a 1.3% increase from previously (Trading Economics). For reference, the ideal rate of inflation, according to Sveriges Riksbank, is 2.0%. By providing references we can see how high the inflation rate is. A few of the reasons for the high inflation are the
increased prices of food, fuel and electricity. Since these are among the highest contributors to the calculation of the CPIF (Consumer Price Index with Fixed interest rate), it can be concluded that these are among the highest contributors to the rate of inflation.
Due to the increase in inflation, governments try their best to reduce the numbers, so that consumers are not as heavily affected. Due to the increase in prices which has caused inflation, we can conclude that we are facing “Cost-Push” inflation. This is the more difficult type of inflation that governments have to deal with, however, by implementing demand-side policies, the inflation rate can be reduced. For further understanding of the article, it is recommended to visit Riksbanken’s website.
As students studying in Sweden, we are at the age of understanding how the world around us works. While the responsibilities and impacts of the inflation rate may be less for us compared to that of workers and adults, it is quite important to keep ourselves knowledgeable. Hopefully, students continue to conduct their own research regarding the happenings of the world around them, even while studying.
By Moiz
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