Norway: Inflation ticks down in February, but core inflation accelerates quickly

Consumer prices rose 0.8% in February compared to the previous month, contrasting the 0.5% fall in January. This latest outturn was due to higher prices for food and non-alcoholic beverages, and more expensive clothing and footwear. On the other hand, prices for housing, water, electricity, gas and other fuels fell in February.

Inflation ticked down to 3.0% in February from 3.1% in January, although it remained above Norges Bank’s 2.0% target rate again. Meanwhile, annual average inflation accelerated to 3.0% from 2.9%.

Core consumer prices—which are adjusted for tax changes and exclude energy prices—rose 1.2% in February compared to the previous month, contrasting the 0.7% fall in January. Core inflation notably accelerated to 2.6% from 2.1%.

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 2.2%, which is up 0.1 percentage points from last month’s estimate. In 2020, our panelists see inflation averaging 1.9%.