Inflation in Sweden is higher than expected – and that’s partly Beyoncé’s fault

Inflation in Sweden was higher than expected in May, but for once it may not have been the cost of a roof over your head or food on the table that drove up the cost of living, but something completely unexpected: Beyoncé.

Sweden’s core inflation was 8.4 percent on an annual basis in May, the country’s statistics office reports. reported this week. That was lower than the previous month’s level, but higher than what economists hoped to see — and a major reason for that was an unexpected increase in spending on hospitality and various other miscellaneous recreational and cultural activities.

Spending on restaurants and hotels rose 0.3 percent in May alone, which had the biggest impact on the overall rate increase.

That left many policymakers scratching their heads over what exactly justified all the socializing, and an economist at a Danish investment bank came up with a new explanation: it was Beyoncé’s fault.

The music icon launched her world tour with two concerts at Friends Arena in Stockholm on May 10 and 11. The sold-out shows attracted nearly 50,000 people to each show, with fans from all over the world, including Canada, coming to take advantage of favorable exchange rates against the Swedish krona.

Expenditure increase

For a city of less than a million people, the infatuation of possibly more than 100,000 members of the Bey-hive caused the restaurant business to boom and hotel rooms to sell out even far beyond the city’s outskirts.

The tour, which will make more than 50 stops, including three in Canada later this summer, is estimated to have a total economic impact of more than $2 billion US. And Michael Grahn, chief economist at Danske Bank, said the impact of all that spending is already being felt.

“Beyoncé’s start of her world tour in Sweden seems to have colored inflation in May,” he said on Twitter. “How much is uncertain, but probably 0.2 of the 0.3 percentage point that hotels/restaurants added.”

A 0.2 percent increase in recreation spending was also likely related, he suggested.

Genevieve Roch-Decter, CEO of Toronto-based investment firm GRIT Capital, said the idea is not far-fetched. “It’s almost like she’s the one controlling the economy, not the central banks,” she told CBC News. “You can’t make this stuff up.”

Visit Stockholm, the city’s tourist office, dubbed the phenomenon “the Beyoncé Effect” last month.noting that most hotel bookings came from visitors from the UK, Germany and the United States.

Swedish investment bank Swedbank noticed that spending on recreation and culture increased by 15 percent compared to the same week a year earlier, “primarily driven by higher spending on theater tickets and concerts”.

Temporary bump

Strange as it may be to believe, tens of thousands of Beyoncé fans getting in formation to open their wallets seems to have been enough to undermine the country’s economy, at least temporarily. And it is not entirely without precedent.

Last fall, Statistics Canada saw a nearly five percent increase in spending on performing arts, spectator sports and related industries in October 2022. The reason for the increase was a perfect scheduling storm, as the Toronto Blue Jays moved three games from April to October, and the team played two more wild card playoff games.

Also, “a late start to the National Hockey League preseason in September contributed to a higher-than-usual increase in attendance in October,” the data agency said.

While that spending blip was as short-lived as Canadian professional sports teams’ title aspirations that year, time will tell if Beyoncé-related spending has more staying power.