Norway: Inflation accelerates in August

Consumer prices fell 0.4% month-on-month in August, contrasting the 0.7% increase in July and marking the first decrease in seven months. According to Statistics Norway, August’s reading was due to lower prices for food and non-alcoholic beverages, which more than outweighed higher prices for clothing and footwear.

Inflation accelerated to 3.4% in August from 3.0% in July, the highest rate in over one and a half years. Annual average inflation ticked up to 2.1% in August from 1.9% in July.

Core consumer prices—which are adjusted for tax changes and exclude energy prices—fell 0.5% month-on-month in August, contrasting July’s 0.6% rise. Core inflation inched up to 1.9% in August from 1.4% in July, which was above market analysts’ expectations of 1.7%.

Norway Inflation Forecast

The Central Bank projects that inflation will average 2.3% in 2018 and 1.6% in 2019. FocusEconomics Consensus Forecast panelists expect inflation to average 2.3% in 2018, which is up 0.1 percentage points from last month’s estimate. In 2019, they expect inflation to average 1.9%.