(Bloomberg) --
Swedish producer prices soared at the fastest pace in more than 30 years last month, signaling that an energy-fueled cost surge may translate into more broad-based inflation.
Factory-gate prices in the export-driven Nordic economy rose by 20.1% in December from a year ago, boosted by a 67%-leap in energy-related products, according to Statistics Sweden. Import prices also increased at the fastest pace for the period starting 1990 when the office began using the current methodology.
The reading comes as doubts have increased about the Swedish Riksbank's plans to keep its policy rate at zero through this year and next. While producer prices aren't targeted by the central bank, their increase raises the risk that costs will be passed on to consumers, eroding the Riksbank's argument that underlying inflation remains moderate.
Knut Hallberg, a senior economist at Swedbank AB, said the latest data showed a broad-based increase across all sub-indices, driven by high electricity prices. The reading “strengthens the impression that we will also see an increase in underlying consumer inflation during this year,” Hallberg said.
The cost inflation was also notable as Essity AB, the world's second largest supplier of consumer tissue, on Wednesday reported quarterly earnings that were far weaker than analysts had expected. The maker of Lotus tissue and Libero diapers said it plans significant price increases to make up for the rising cost of raw materials, energy and distribution.
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