Beyoncé is known for her lavish and extraordinary lifestyle. Whether it be her $200 million Malibu house or her expensive car collection, the singer spares no expense when it comes to experiencing finer things in life. According to analysts, Beyoncé’s presence in Stockholm may explain the unanticipated surge in prices for specific goods and services in May.
Despite the typical factors associated with rising inflation in many countries, such as the global economic slowdown, central bank policies, geopolitical tensions, and supply-demand imbalances, economists at a prominent bank in Sweden have surprisingly attributed higher-than-anticipated inflation to none other than the American singer Beyonce. Yes, it may sound astonishing, but indeed the claim.
Danske Bank economists in Sweden have made a surprising claim, suggesting that Beyonce’s choice to commence her world tour in Stockholm in May is responsible for a rise in local hotel prices and, subsequently, higher-than-anticipated inflation. The opening two sold-out concerts of Beyonce’s Renaissance tour attracted thousands of fans from around the world to Stockholm. Reports indicate that many attendees had to secure accommodation outside the city, leading to significantly increased prices.
Beyoncé’s visit to Stockholm causing inflation?
Analysts suggest that Beyoncé’s visit to Stockholm may be a potential explanation for the unforeseen increase in prices for specific goods and services in May. Michael Grahn, Chief Economist at Danske Bank in Sweden, estimated that Beyonce’s concerts contributed 0.2 percentage points to the inflation rise. Grahn expressed astonishment at the substantial impact of a single event, emphasizing that such a situation was unprecedented.
Economists anticipate that the effects of the inflation surge will diminish in the coming months. However, some experts, including Andreas Wallstrom, the Head of Forecasting at Swedbank, express concerns about the potential impact of future concerts in Sweden. Wallstorm specifically mentioned Bruce Springsteen’s upcoming three-night performance in Gothenburg at the end of June, raising apprehensions about a similar effect on prices and inflation.
Beyonce, the renowned artist behind hits like ‘Halo’ and ‘Crazy in Love’ and formerly part of Destiny’s Child, is currently embarking on her first tour in seven years. This highly anticipated comeback has generated significant ticket demand in Europe, and she is set to begin her tour in the United States next month.
Many American fans have traveled to Sweden to take advantage of the weak Swedish krona and notably lower ticket prices compared to those in the US. Original ticket prices for Beyonce’s concerts in Stolkholm ranged from SEK650 to SEK1495 (approximately Rs 4,975 to Rs 11,430) per ticket. In contrast, the Ticketmaster price for standard admission to her Las Vegas Shows ranges from $91 to $689 (approximately Rs 7,475 to Rs 56,600). Resale tickets in other US cities are being sold at several times their face value.
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What is the data?
Official data indicates that Sweden’s inflation reached its highest point in December, standing at 12.3 percent. However, the rate decreased to 9.7 percent last month, down from April’s 10.5 percent. Financial markets had anticipated a slightly lower rate of approximately 9.4 percent.
After reaching a more than 30-year high of 12.3 percent in December, inflation in Sweden slightly slowed to 11.7 percent in January but unexpectedly surged back to 12 percent in February. Similar to other countries like the United States and Europe, the Swedish central bank has responded to inflationary pressures by increasing its benchmark interest rate.
In late April, the Riksbank raised the rate to 3.5 percent and indicated that there would likely be another quarter-point increase in either June or September. The Riksbank uses inflation-adjusted fixed interest rates (CPIF) as a key indicator for guiding monetary policy. In May, the CPIF stood at 6.7 percent, down from 7.6 percent in April.
For the entire year of 2023, the central bank anticipates a 0.7 percent contraction in the Swedish economy and has projected unadjusted inflation of 8.9 percent along with rising unemployment.
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On Thursday, the European Central Bank(ECB) is expected to raise its deposit rate to 3.5 percent, aligning it with the Riksbank’s planned rate increase in either June or September. Despite any temporary impact of Beyonce’s concert, economists, considering the latest price data, largely predict a quarter-point rate increase announcement from Riksbank on June 29.
Torbjorn Isaksson from Nordea commented that May’s inflation figures exceeded expectations given the overall economic improvement. This strengthens the belief that the Riksbank will indeed raise rates in June, according to Isaksson’s analysis.
