Norwegian economists were pleasantly surprised last week, when new figures showed a consumer price index (CPI) for July that indicates prices in Norway were 5.4 percent higher than in July of last year. That’s down from 6.4 percent in June, but food prices keep risisng.
The decline in the overall core inflation rate is tied mostly to the decline in energy rates, which have fallen considerably from record high levels. Clothing and shoe prices have also declined, by 4.5 percent, but Espen Kristiansen of state statistics bureau SSB (Statistics Norway) stressed to state broadcaster NRK that “5.4 percent is still a very high price rise.”
The rise in food prices alone was even higher, up 8.9 percent over July of last year. That was down from 13.7 percent in June, though: “Food prices had an historically high increase from June to July last year,” Kristiansen told NRK.
He noted that a full percentage-point decline from June to July is also significant. It may help ward off a higher jump in interest rates, as the central bank prepares to release it next report on its policy rate next week. It currently stands at 3.75 percent and has been expected to jump by a half-point to 4.25 percent. Now some economists think a quarter-point rise, to 4 percent, will be sufficient, still pushing home loan rates up to around 6 percent.