Norwegian Inflation Falls
Inflation in Norway has fallen slightly during the month of October according to the latest official figures published this morning. Unlike most developed economies at this point in time, the fall in pace of Norway’s price growth activity is likely to be a welcome prospect. The headline Consumer Price Index (CPI) is now showing at 2.0% year on year, this is down a tick from the 2.1% experienced in September and comes largely in line with market analysts expectations. The month on month reading is now at just 0.1% for October, although fully anticipated this does represent a drop from the September number of 0.5%.
The Core CPI readings for Norway are significantly higher than the general figures and concerningly these appear to be moving in the wrong direction. Year on year the Core CPI reading for October has been reported as 2.5%, this represents an increase over the 2.4% experienced the previous month and surprised analysts that had been anticipating no change in this reading this morning. The Core CPI number has fallen when measured on a month on month basis, this now stands at 0.2% compared to 0.5% the previous month but falls short of the expected drop to 0.1% this month.
The normalising in Norway’s rate of price growth would largely a seen as a positive development if it was occurring in a manner that was being controlled by the monetary authorities. The reality is that this phase of price growth moderation is in response to a general weakening of Norway’s overall economic situation. The country is still on target for 2.25% GDP growth this year but the outlook is beginning to darken somewhat, trade has been hit by Russian sanctions and a slowing in Europe while the depressed price of oil is leading to a postponement of some large investments in the Norwegian economy. Anticipated interest rate rises from the current 1.5% have now been put on hold until much later next year.
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