Norwegian inflation likely to have risen slightly higher than Norges Bank’s view in January

Norwegian inflation is expected to have come in a bit higher than the central bank’s projection. According to a Nordea Bank research report, Norway’s core inflation is likely to have risen to 1.5 in January percent year-on-year from December’s 1.4 percent. The central bank projects 1.4 percent.

There are major and varied price cuts in the seasonal winter sale and several prices that are seldom changed are regulated in January. Moreover, both food prices and airfares might surprise, signifying that one should be ready for surprises that potentially might move the market, stated Nordea Bank.

The slightly higher growth projection is because the price cuts during the seasonal sale last year were rather aggressive while more moderate cuts were anticipated in 2018. The NOK’s depreciation through 2017 should begin pulling up prices on imported goods, also impacting the projection. Airfares are expected to have fallen considerably after the high December figure, stated Nordea Bank.

Core inflation is expected to be 0.1 percentage point above Norges Bank’s projection, which is not sufficient to have any effect on the central bank’s view.

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