While Norway’s central bank may have decided to keep the key policy rate unchanged for now, fresh inflation figures released on Friday spell good news for those hoping for cuts in the future.
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.
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“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.
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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.