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Wednesday, April 24, 2024

Inflation down but outlook unclear

Economists have been speculating for weeks over whether interest rates will rise or fall during the next several months. Norway’s inflation rate has eased, but it remains more than twice what the central bank wants and the krone is still very weak.

State statistics bureau SSB (Statistics Norway) pegged the current inflation rate at 4.5 percent for last month, with core inflation (excluding changes in energy rates, taxes and fees) at 4.9 percent. That marked the first time core inflation was under 5 percent since August 2022.

The numbers cheered government officials desperate for signs of good news for Norwegian households still struggling with high prices and relatively high interest rates, which news bureau NTB reports have hiked costs for a famiily with two children by more than NOK 177,000 over the last three years. Few expected any rate cuts coming out of this week’s meeting of the central bank’s monetary policy committee.

Labour and employer organizations that were beginning wage negotiations this week are working, meanwhile, with an agreed-upon inflation rate estimate for this year of just 4.1 percent. That’s lower than the current rate and is subject to adjustment, but suggests labour unions won’t accept any pay raise offers of less than that and will fight for more, in order to ensure some “real” pay growth for workers. staff



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