Norway: Inflation increases in July
Inflation edged up to 2.8% in July from June’s 2.6%. July’s pickup was the first since November but was in line with market expectations. Looking at the details of the release, the acceleration was broad-based, with greater price pressures recorded for transportation, housing and utilities plus food and non-alcoholic beverages.
Still, the trend pointed down, with annual average inflation falling to 3.9% in July (June: 4.1%). Meanwhile, core inflation edged down to 3.3% in July from the previous month’s 3.4%. This print undershot both market analyst and Norges Bank expectations and marked an over two-year low.
Finally, consumer prices increased 0.52% from the previous month in July, accelerating from the 0.22% increase recorded in June.
Our panelists expect inflation to accelerate further from current levels over the rest of Q3, partly reflecting a less favorable base of comparison. In Q4, our Consensus is for disinflation to resume, resulting in lower average inflation overall in H2 compared to H1. Stronger-than-projected wage growth and a more robust-than-expected rebound in private consumption pose upside risks to the outlook.
Overall in 2024, inflation will decrease from last year on a high base of comparison and tight financing conditions. Looking further ahead, inflation will gradually ease, but our panelists see it remaining above Norges Bank’s 2.0% target until 2028.