Norwegian Key Policy Rate 4.5% vs. Exp. 4.5% (Prev. 4.5%); the policy rate forecast implies that the policy rate will remain at 4.5% to the end of 2024 before being gradually reduced from Q1-2025

Rates

• "The policy rate will likely be kept at 4.5 percent to the end of the year,”
• Governor bache: “We believe that there is a need to keep the policy rate at today’s level for a period ahead but that the time to ease monetary policy is approaching".
• The Committee judges that a restrictive monetary policy is still needed to bring inflation down to target within a reasonable time horizon.
• If prospects suggest that inflation will return to target faster or there is a more pronounced slowdown in the Norwegian economy, the policy rate may be lowered faster than currently envisaged.
• If the krone depreciates further or capacity utilisation increases, wage and price inflation could remain elevated for longer. A higher policy rate than currently envisaged may then be required.

Inflation

• Inflation has declined markedly from its peak, but underlying inflation has not declined to the same extent.
• The rapid rise in business costs and the krone depreciation are expected to restrain further disinflation.
• Inflation is projected to approach 2 percent towards the end of 2027.

Growth

• Economic growth is set to pick up slightly in the years ahead.

Unemployment

• Unemployment will likely edge up