How much can you save travelling now to
Why Sweden is cheaper now?
Sweden is a country which has never been considered as cheap place to travel. High taxes and strict labor laws make products and services in this country expensive. However, of all the Scandinavians, it has become much more affordable.
Sweden is not as expensive as Norway, many museums are free to visit and it is possible to rent affordable accommodation. But now it has become even cheaper, due to Swedish Krona plunge since the beginning of 2019. The reasons of currency weakness are the underperformance of economical growth in comparison with EU growth; possible cancellation of rate hike from Riksbank, based on a weak outlook for inflation; fears of global slowdown.
Update. On the 19th of December Swedish Central Bank has risen its main interest rate for the first time in 5 years. Riksbank’s experiment to boost inflation (and economic growth) by inventing negative interest rates is finished (for a while?). It was the decision which was expected and we saw the slow growth of Krona from the 09 October.
What does it mean for us? We still believe that Sweden is more affordable: year-to-year Krona loses 2.73% trying to compete with European goods and services.
Krona has lost more than 3% in comparison with Euro and more than 7% with USD.
Inflation rate is 1.8% and EU inflation is 1.6%.
There are plenty of cheap tickets to Sweden from other European countries. The cheapest tickets in June are:
28€ from Budapest
31€ from Vienna
34€ from Hamburg
40€ from Gdansk
The BigMac Index by The Economist suggests that Swedish Krona is 4% undervalued if we look at the Raw Index. And is 2,6% overvalued using GDP-adjusted methodology.