Core Inflation in Norway Eases More Than Expected

OSLO (Reuters) – Norway’s core inflation rate eased more than expected in December, according to data from Statistics Norway (SSB) released on Friday, supporting forecasts that interest rates may begin to decline this year.

Core inflation, which strips out changing energy prices and taxes, stood at 2.7% year-on-year, down from 3.0% in November and below the 2.8% expected by analysts in a Reuters poll.

Norges Bank had anticipated core inflation of 2.8%.

In December, Norges Bank kept interest rates on hold at a 16-year high of 4.50% and indicated plans to cut rates three times in 2025, down from four cuts previously suggested, with the first easing expected in March.

The central bank, which targets core inflation of 2.0%, expected the policy rate to decline to 3.75% by the end of 2025, which may hinder global monetary easing hopes.

Norges Bank is scheduled to announce its next policy rate on January 23.

The price of food and non-alcoholic beverages rose by 4.0% year-on-year, contributing significantly to inflation, as per the SSB data.

Headline inflation, which includes changes in energy costs and taxes, eased in December to 2.2% from 2.4% in November, while analysts in the Reuters poll had expected a reading of 2.5%.