POLAND: MNI POLITICAL RISK ANALYSIS - Poland Election Preview

The Swedish April Economic Tendency Indicator weakened to 94.8 (vs a two tenth downwardly revised 95.0 prior), its lowest since August. The fall was driven by consumers, with overall industry sentiment actually ticking higher on the month. However, expected employment metrics softened, which taken alongside an uptick in firm inflation expectations, highlights a difficult trade-off for the Riksbank. Overall, the survey should support rates to be kept on hold at 2.25% on May 8, but the risks are tilted towards more easing ahead, in our view.

• Consumer confidence reached its lowest since December 2023 at 81.6 (vs 88.8 prior). Consumer’s view of their own personal situation and the general economic situation both deteriorated notably.
• Aggregate business confidence was 99.9 (vs 98.9 prior).
• Manufacturing sentiment rose to 99.6 (vs 96.7 prior), driven by an increase in expected production over the next three months. There was also an uptick in past export orders, which could reflect some tariff front-loading.
• Retail (105.1 vs 104.7 prior) and services (98.0 vs 97.7 prior) sentiment rose a touch, while construction (100.0 vs 101.5) softened.
• There was a fall in expected employment metrics across industries, with manufacturing respondents seeing the first net negative reading since July 2024.
• On an aggregate basis, expected price metrics softened a touch but remain well above last year’s average (23 in April vs 24 in March, 14 avg in 2024). Expected prices amongst food retailers in particular remain elevated at 80 (vs 86 in March).
• Firms inflation expectations over the next 12 months rose to 2.7% Y/Y, from 1.7% in Q4. 

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Eurozone consumer inflation expectations rose in March to the highest levels in a year, according to the ECB's Consumer Expectation Survey. However, this is unlikely to sway many Governing Council views, with the current focus clearly on downside growth risks stemming from tariffs and related uncertainty. 

• Expectations for inflation over the next 12 months increased by 0.3 percentage points to 2.9%, the highest level since April 2024, while expectations for three years ahead edged up by 0.1 percentage points to 2.5%, the highest since March 2024.
• The four-analyst strong BBG consensus saw 1-year ahead expectations at 2.5% and 33-year at 2.3%.
• Expectations for inflation five years ahead, reported for the first time this month, were unchanged for the fourth consecutive month at 2.1%.
• Inflation over the previous 12 months was perceived at 3.1% in March. Data released by Eurostat showed year-on-year HICP at 2.2% that month.