© Reuters.
OSLO (Reuters) – Norway’s core inflation rate eased in February to an 18-month low, Statistics Norway (SSB) data showed on Monday, supporting the central bank’s view that interest rates will decline later this year.
Core inflation, which strips out changing energy prices and taxes, stood at 4.9% year-on-year in February. Analysts polled by Reuters had, on average, expected the rate to remain unchanged from January at 5.3%.
“We are on the right track,” Finance Minister Trygve Slagsvold Vedum said in a statement, adding that lower inflation was good for consumers and the wider economy.
The finance ministry said it now expects mainland gross domestic product, which strips out volatile effects on the economy of Norway’s oil and gas industry, to grow by 0.9% this year, up from an October forecast of 0.8% growth.
In 2025, mainland GDP was forecast to grow 1.6%, the ministry said.
The central bank in December raised its benchmark interest rate by 25 basis points to 4.50% in a surprise decision, and has said the cost of borrowing would likely stay at that level “for some time ahead” before being cut.
Norway’s currency, the crown, traded unchanged against the euro at 11.41 by 0749 GMT.
Norges Bank in December projected year-on-year core inflation for February of 5.5%, and is due to release a new forecast on March 21.
Headline inflation, which includes changes in energy costs and taxes, meanwhile eased in February to 4.5%, while analysts in a Reuters poll on average had expected the year-on-year rate to rise to 4.9% from 4.7% in January.
The price of food rose by 6.3% over the 12 months since February of last year, the SSB data showed.
(This story has been corrected to fix the central bank’s forecast to 5.5%, from 5.4%, in paragraph 8)
Read the full article here
