Norway’s consumer price inflation slowed more-than-expected to the weakest since early 2022, easing pressure on the central bank to hike the interest rate further.
Consumer prices registered an annual increase of 3.3 percent in September after climbing 4.8 percent in August, Statistics Norway reported Tuesday. The rate was slower than economists’ forecast of 4.0 percent and also the weakest since January 2022, when prices were up 3.2 percent.
Norges Bank aims to keep consumer price inflation close to 2 percent over time. In September, the bank had raised the benchmark rate by 25 basis points to 4.25 percent and hinted at another hike in December.
However, the marked slowdown in inflation reduced the possibility for another tightening.
On a monthly basis, consumer prices dropped only 0.1 percent, following a 0.8 percent decline. However, prices were expected to climb 0.5 percent in September.
Core inflation softened more-than-expected to 5.7 percent from 6.3 percent in August. Economists were expecting the rate to slow moderately to 6.1 percent. A similar lower rate was last seen in November 2022.
Data showed that cost of housing, water, electricity, gas and other fuels declined 4.9 percent annually. Meanwhile, food and non-alcoholic beverages prices advanced 7.4 percent.
Another data from the statistical office showed that producer prices continued to log sharp double digit decreases in September. Prices of energy goods, extraction and related services and electricity, gas and steam registered sharp decreases in September.
Producer prices slid 29.3 percent annually after declining 37.4 percent in August. Month-on-month, producer price inflation held steady at 4.8 percent in September.