Money in Norway
Norway - Money
Norges Bank delivers larger-than-expected hike in June
At its 22 June monetary policy meeting, the Executive Board of Norges Bank unanimously voted to increase the sight deposit rate by 50 basis points, bringing it to 1.25%. The decision to raise was priced in by markets, although the size of the hike took market analysts largely by surprise—the move was the largest increase since 2002.
The decision was driven by a persistently high inflation rate, with the country’s ongoing robust performance providing further room for the increase. The board noted that headline inflation remains markedly above its 2.0% target, while core inflation has been higher than expected. Additionally, strong wage growth and imported goods inflation signal that it will likely remain above target “for some time”. Regarding activity, Norges Bank noted that there is little slack in the economy and unemployment levels have fallen more than expected. The Bank believes that a higher policy rate should not bring employment levels down given the tightness of the labor market.
In terms of forward guidance, Norges Bank hinted that it would deliver a 25 basis point increase at its next meeting, scheduled for August. Additionally, it now expects the sight deposit rate to reach 3.00% in the summer of 2023. That said, in the assessment of the balance of risks, the Bank noted that if upside risks materialize and inflation is higher than expected, the rate would be increased faster. At the same time, if downside risks were to materialize, the rate would be raised less than the Bank currently projects.
The next monetary policy rate decision is set to be announced on 18 August.
FocusEconomics Consensus Forecast panelists project the sight deposit rate to end 2022 at 1.60% and 2023 at 2.23%.
Norway - Money Data
|Money (annual variation in %)||0.6||5.1||6.0||5.3||4.1|
5 years of economic forecasts for more than 30 economic indicators.
Norway Money Chart
Source: Norway Central Bank and FocusEconomics calculations.
|Bond Yield||1.58||-0.65 %||Jan 01|
|Exchange Rate||8.78||-0.38 %||Jan 01|
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August 8, 2022
Industrial output slid 1.7% in month-on-month seasonally-adjusted terms in June, which contrasted May's 1.1% increase.
July 11, 2022
Consumer prices rose 0.91% from the previous month in June, picking up from the 0.25% increase recorded in May.
July 7, 2022
Industrial production rose 0.7% month-on-month in seasonally-adjusted terms in May (April: -0.3% mom).
July 7, 2022
Economic output rebounded in May, as GDP expanded 0.4% over the prior month in seasonally-adjusted terms, swinging from the 0.4% decline recorded in April.
June 22, 2022
At its 22 June monetary policy meeting, the Executive Board of Norges Bank unanimously voted to increase the sight deposit rate by 50 basis points, bringing it to 1.25%.