Positive inflation

Holiday times are in full swing and summer has so far offered a mix of sun, rain and positive macroeconomic news. But what does it really mean for you as an entrepreneur and what can you expect going forward?

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At last, inflation is falling

Inflation in Sweden has fallen continuously since the peak in December 2022. However, May offered disappointment when the inflation figure was unchanged from April and higher than estimated. June, on the other hand, brought some really positive news. After being above the Riksbank's target of 2 per cent in late August 2021 landed inflation of 1.3 per cent According to the CPIF which is the measure the Riksbank goes by. A figure that was lower than both the Riksbank and the market forecast.

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This is positive news for entrepreneurs on several fronts. Inflation leaves customers at risk of pulling down on deals as their overheads increase. But it also affects entrepreneurs in the same way that it affects consumers, where high inflation leads to increased costs for the purchase of both goods and services. More price-sensitive customers at the same time as you suffer from cost increases is a difficult balancing act, but the fact that inflation is now falling will hopefully lead to the situation moving more towards normal.

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Bankruptcies are decreasing

Another positive message from the summer was that credit reporting company UC reported that Bankruptcies decreased for the first time in two years. Bankruptcies, however, remain at record levels seen for the year as a whole, but a reduction instills optimism for the second half of the year. Just as inflation affects in several ways, bankruptcies do so with it. Reducing the number of bankruptcies therefore has a positive impact on the entire food chain.

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The key interest rate will be lowered

The Riksbank has so far this year lowered the key interest rate by 0.25 per cent in May and in recent monetary policy The decision signalled that there could be three more cuts this year. The consensus among economic analysts is that there will be between two and four cuts this year and the majority of big banks believe the first occurs as early as August. The fact that the key rate is being cut is a relief for both households and businesses that have been squeezed by the high levels of interest rates.

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What does it mean for entrepreneurs?

The fact that inflation is falling, bankruptcies are decreasing and the key interest rate is a positive thing for society as a whole. As an entrepreneur, it also means that you can hopefully start to exhale after the tough period that has been. When the key interest rate falls, the purchasing power of the community increases and as an entrepreneur, you can expect sales to pick up again. The cuts will also have an effect on several levels. As interest rates decrease, your suppliers' costs will fall, which is likely to have positive effects on your purchase prices.

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In the long run, reductions in the key interest rate will also lead to a reduction in financing costs for companies, which have a certain lagging effect compared to variable mortgages. The cost of investing in your business will therefore drop it by. All in all, the positive news of the summer means that you as an entrepreneur can start looking more hopefully towards the future and go into autumn with optimism.