Why Are Economists Blaming Singer Beyonce For Sweden's High Inflation?

Central bankers in Sweden who have been looking for somebody to blame for unrelenting price pressure amid high inflation have a new target: Beyonc¨¦.

Sweden's Struggle With High Inflation

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Swedish inflation fell below 10% in May, official statistics showed but was still higher than expected with some analysts suggesting superstar Beyonc¨¦ had tipped the scales. Consumer prices rose by 9.7% in May year-on-year, down from 10.5% in April, the first time inflation has come in under 10% in over six months.

While a decrease in electricity and food prices contributed to the lower inflation rate in May (the month in which Beyonce came), said Statistics Sweden, at the same time, costs of certain goods and services rose. ¡°For instance hotel and restaurant visits, recreational services, and clothing,¡± the agency said, as per The Guardian.

Why Is Beyonce Being Blamed For Sweden¡¯s High Inflation?

According to Michael Grahn, chief economist for Sweden at Danske Bank (Denmark's largest bank), Beyonc¨¦'s visit to the country¡¯s capital city of Stockholm could explain why the inflation rate was higher than expected.

¡°Beyonc¨¦¡¯s start of her world tour in Sweden seems to have coloured May inflation, how much is uncertain,¡± Grahn said in a post on social media. Grahn said that her much-hyped concert in May ¡°probably¡± accounted for 0.2 of the 0.3 percentage points added to inflation by hotels and restaurant prices, as per the report.

Tens of thousands of fans flocked to Stockholm in the middle of May to catch the two concerts that kicked off Beyonce's first solo tour in seven years. Estimates put the crowd at each concert at 46,000, with some forced to stay outside the capital as hotels filled up.

It was reported that a number of fans had travelled from overseas to see the shows, taking advantage of the weak Swedish currency and lower ticket prices.

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¡°A Very Rare Effect¡±

Denmark's largest bank's economist Grahn told the Wall Street Journal that the effect was ¡°very rare¡± and he expected the situation to return to normal in June. However, one economist told the Financial Times (FT) that Sweden could experience a similar inflation bump when Bruce Springsteen plays three nights of concerts in Gothenburg in June.
Inflation in Sweden peaked in December at 12.3% ¨C a more than 30-year high ¨C then slowed slightly in January to 11.7%, but unexpectedly spiked back to 12% in February.

Like its peers in the United States and Europe, Sweden¡¯s central bank has repeatedly hiked its guiding rate in an effort to rein in inflation. Sweden's central bank, the Riksbank, had raised the rate to 3.5% in late April and said it would ¡°probably¡± raise it by another quarter-point in June or September.

No Impact On Other Countries¡¯ Conducting Concerts?

Beyonc¨¦¡¯s Renaissance tour moved from Sweden's capital city Stockholm through several European capitals including Brussels, Cardiff, and Edinburgh and five nights in London. She has seven more dates in Germany, the Netherlands and Poland before moving to Canada and the US, as per an FT report.

However, her impact has yet to show up in any of the other countries¡¯ inflation data. Large sporting tournaments often skew economic statistics but economists said it was rare for a single event to do so.

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