Norway: Inflation moderates in January but remains well above Norges Bank's target
February 11, 2019
Consumer prices fell 0.5% in January compared to the previous month, contrasting the steady reading in December. January’s decrease was primarily due to lower prices for clothing and footwear. On the other hand, prices for food and non-alcoholic beverages; alcoholic beverages and tobacco; and housing, water, electricity, gas and other fuels all rose in January.
Inflation moderated to 3.1% in January from 3.5% in December, although it remained above Norges Bank’s 2.0% target rate again. Meanwhile, annual average inflation rose 2.9% in January, up from 2.8% in December.
Core consumer prices—which are adjusted for tax changes and exclude energy prices—fell 0.7% in January compared to the previous month, contrasting the steady reading in December. Core inflation remained unchanged in January from December’s 2.1%, which was below market analysts’ expectations of an uptick to 2.3%.
Norway Inflation Forecast
Norges Bank expects inflation to average 1.8% in 2019 and 1.6% in 2020. FocusEconomics Consensus Forecast panelists expect inflation to average higher than the Central Bank. In 2019, inflation is seen by our panel averaging 2.1%, which is up 0.1 percentage points from last month’s estimate. In 2020, our panelists see inflation averaging 1.9%.
Author: Edward Gardner, Economist