Norway: Inflation rises more than expected in May
Latest reading: Inflation jumped to 3.0% in May from April’s 2.5%, overshooting both market and Norges Bank expectations and remaining above the latter’s 2.0% target. Looking at the details of the release, food and housing costs accelerated sharply, outweighing a softer rise in transport prices.
Still, the trend was unchanged, with annual average inflation coming in at April’s 2.7% in May. Meanwhile, core inflation—the Norges Bank’s preferred gauge of price pressures—dropped to 2.8% in May from April’s 3.0%, below market and Norges Bank projections.
Lastly, consumer prices rose 0.36% over the previous month in May, cooling from the 0.66% increase seen in April.
Outlook: Our panelists see inflation trending down through Q4 and averaging below 2024’s level this year as a whole, kept in check by elevated interest rates, easing food prices, softer wage growth and a high base of comparison. Still, price pressures should remain above the Norges Bank’s 2.0% target for the fifth consecutive year in 2025 due to healthier private spending growth. Premature monetary policy easing and a weaker krone are upside risks.