Latest news with #EspenKristiansen
Local Norway
09-05-2025
- Business
- Local Norway
Fresh inflation figures good news for Norway's interest rate outlook
Annual inflation in Norway between April 2025 and the same month last year was measured at 2.5 percent, figures released by the national data agency Statistics Norway on Friday showed. 'It was especially the prices of food and non-alcoholic beverages that contributed to the drop in the growth rate,' section manager Espen Kristiansen said of the figures. Food prices fell two percentage points from March to April this year, but were only 3.1 percent higher than in April last year. This was 5.5 percentage points lower than March's 12-month food inflation figure. The slowdown in food price inflation between March and April was due to a late Easter this year. 'A significant drop in food price inflation was expected from March to April, partly because Easter fell in March last year, while it was in April this year. Easter offers pulled food prices down in April this year, while a similar effect last year occurred the month before,' Kristiansen said. Economists said the figures released on Friday were good news for consumers in Norway. 'Both [core and general inflation] are slightly down from last month, and we are really starting to approach the inflation target. It is slightly lower than Norges Bank expected, and that is good news for the interest rate outlook, Kyrre Knudsen, chief economist at Sparebank 1 Sør-Norge, told the newswire NTB. Meanwhile, Karine Alsvik Nelson, macroeconomist at Handelsbanken, told business and finance news outlet E24 core inflation came in lower than expected. Advertisement 'Core inflation came in lower than expected, which is positive, but Norges Bank will probably still be wait-and-see as they have been keen to claim that price pressures are more on the decline too soon,' she said. 'The driving forces are still strong with high wage growth and a weaker krone, so a cut in June is still unlikely in our view, even though the numbers today were lower than both we and Norges Bank had expected,' she added. On Thursday, Norway's central bank maintained its policy rate at 4.5 percent as inflation remains above its two percent target. "Trade barriers have become more extensive, and there is uncertainty about future trade policies," Norges Bank deputy governor Pål Longva said. "This may pull the interest rate outlook in different directions," Longva added. READ MORE: Sweden and Norway leave interest rates unchanged amid global turmoil Economists generally expect the first interest rate cut to arrive in the autumn, and the central bank said on Thursday it expected rate cuts to be implemented during the autumn.
Local Norway
10-03-2025
- Business
- Local Norway
Economists warn Norway's shock inflation figures could delay interest rate cuts
Increased energy prices contributed to a 3.6 percent increase in the consumer price index between February 2024 and the same month this year, according to figures released by Statistics Norway on Monday. 'The price development of electricity was an important reason why the growth rate in the CPI increased from January to February. Electricity prices fell from January to February last year, while they rose in the same period this year. This pulls the twelve-month growth in the CPI up considerably,' Espen Kristiansen, section manager at Statistics Norway, said. Food prices also rose significantly, 7.6 percent in the 12 months from February 2024. The 12-month inflation rate increased by 0.6 percentage points between January and February. Kristiansen said the last time such a large increase was recorded was in the lead-up to record high inflation in 2023. Norway's central bank used aggressive interest rate raises between 2021 and 2023 to try and curb inflation and prevent the country's economy from overheating. After cuts to the key policy rate failed to materialise last year, Norges Bank said that a cut was likely to arrive in March. However, economists have said that Monday's inflation figures could change the central bank's plans and delay any cuts until later in the year. 'These inflation figures were so much higher than expected that Norges Bank must think twice about cutting interest rates at all this year. The interest rate cut in March has definitely been cancelled,' chief economist Kjetil Olsen and macro and currency strategist Sara Midtgaard wrote in an analysis of the latest inflation figures. Chief Economist Kjersti Haugland at DNB Markets told the business and finance site E24 that potential rate cuts were likely to be pushed back until the end of the year. 'We are changing our forecast and are now holding out the possibility that the announced March cut will not come. We are instead estimating cuts in September and December,' she said. The bank had envisioned there being cuts to the key policy rate prior to Monday's figures being released. The key policy rate in Norway currently stands at 4.5 percent, and Norges Bank is set to have its next interest rate meeting on March 27th.
