Inflation in Sweden, EU and the USA

During the 1970s inflation rates increased rapidly throughout the global economy, mainly because of the oil crisis during the same period of time. However, as the majority of OECD members adopted a restrained monetary policy in the 1980s, international inflation was checked and decreased. Since then the inflation rate has been low within the global economy.

However, in Sweden the inflation rate increased rapidly in the late 1980s again. The reasons for this were a very expansive economic policy financed by large budget deficits and generous wage increases combined with repeated devaluations of the Swedish currency, the krona. In the beginning of the 1990s Sweden faced a sever economic crisis. During this period Sweden changed from a fixed to a floating exchange rate which also hade effects on the inflation rate. To curb the inflation rate Sweden changed its monetary policy to focus more on ensuring price stability. As a result, inflation fell to record low levels.

The change in inflation policy and an increasingly harder international price competition have also contributed to the historically low levels of inflation in both Sweden and in other countries since the beginning of the 1990s. However, because of the finacial crisis and the recession which came after the crisis inflation rates have fallen to about zero in many countries around the world.

Inflation in Sweden, EU and the USA

Annual percentage change

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