Archive

Norges Bank: Jan-24

• Norges Bank's decision to hold the policy rate at 4.5% aligns with market expectations and is influenced by the ongoing challenge of managing above-target inflation amidst weak economic growth.
• Key factors influencing future policy decisions include domestic inflation trends, the strength of the krone, and global economic conditions, particularly the policy rate expectations of Norway's main trading partners.
• The committee indicates a readiness to either raise or lower the policy rate in response to shifts in inflation and economic conditions, underlining the balance between curbing inflation and supporting economic growth.

Norway CPI Inflation 4.8% y-o-y (consensus 4.8%) in Dec-23

- Norway's CPI inflation for December 2023 was 4.8% y-o-y, consistent with the consensus forecast and unchanged from the previous month.
- Better news came from the core being 0.1pp less than expected at 5.5% and the outcome sitting 0.73pp below the 1-year average.

Norway Policy Rate 4.5% (consensus 4.25%) in Dec-23

• Contrary to expectations, the Norges Bank raised its policy rate by 25bps to 4.5%, focusing on combating inflation that remains significantly above the target despite some indicators of economic cooling.
• Future interest rate decisions will be influenced by the interplay between maintaining economic growth and employment levels versus the necessity of controlling inflation, especially under the influence of the depreciating krone.
• Global economic conditions, including trading partners' growth and policy rates, alongside domestic economic indicators, will be pivotal in shaping the Norges Bank’s interest rate trajectory, which is expected to stabilize at 4.5% until autumn 2024 before potentially decreasing.

Norway CPI Inflation 4.8% y-o-y (consensus 4.9%) in Nov-23

- Norway's CPI inflation rate in November 2023 was 4.8% year-on-year, slightly below the consensus estimate of 4.9% but still marking the highest growth since July 2023.
- The downside news was in the core, which undershot expectations for no change from 6.0% with the 5.8% outcome.