There are plenty of explanations for the persistently high inflation worldwide: the war in Ukraine, rising energy prices, scrounging inflation of retailers who increase their profit margins, an abundance of post-corona savings. But the American pop icon Beyoncé as the cause of currency depreciation in Sweden? That’s a new variant.
The Swedish statistics agency SCB reported disappointing figures on inflation yesterday. Despite a series of interest rate hikes by the Swedish central bank, core inflation (from which energy prices have been filtered) had fallen only slowly, from 8.4 percent in April to 8.2 percent in May. This was contrary to expectations: Swedish policymakers had expected a larger drop. What was going on here?
Danske Bank chief economist Michael Grahn came up with a remarkable explanation: artist Beyoncé Knowles was partly responsible for the so-called ‘blip’ in the numbers with her Renaissance tour, the diva’s first solo tour in almost seven years. Grahn, who is responsible for economic analyzes on Sweden at his bank, calculated Beyoncé’s share in Swedish inflation at 0.2 to 0.3 percentage points.
Beyoncé kicked off her world tour in Sweden and played two nights at the Friends Arena in Stockholm on May 10 and 11, which attracted a total of 92,000 people. Because it was the start of the world tour, and because the exchange rate between the Swedish crown and the US dollar is very favorable from an American perspective, many Americans also attended the concerts.
Their arrival, together with that of a lot of Swedish visitors, led to a huge increase in the demand for overnight stays in Stockholm. This caused a sharp increase in the prices of hotels and restaurants.
Even in football tournaments
And that’s not just the case in Sweden: searches for accommodations in cities during the tour skyrocketed after it was announced, rental platform Airbnb reported. In any case, tickets for many concerts were sold out within a few days and prices on the resale market skyrocketed.
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Economist Grahn told the BBC that it is rare for one star to cause such an effect on inflation rates. Some major events, such as football tournaments, could trigger similar “inflation blips,” he says. Grahn expects the Beyoncé effect in the June inflation figures to have disappeared.
Incidentally, Beyoncé will be in Amsterdam’s Johan Cruyff Arena for two evenings next weekend. On 30 June, Statistics Netherlands will publish an initial estimate of Dutch inflation in that month.