Norway: Inflation declines to lowest level since January 2021 in June
Inflation came in at 2.6% in June, down from May’s 3.0%. June’s result marked the lowest inflation rate since January 2021 and was below market expectations. The decrease was due to lower price pressures for food and beverages; health; and recreation and culture.
Accordingly, the trend pointed down, with annual average inflation coming in at 4.1% in June (May: 4.4%). Meanwhile, core inflation fell to 3.4% in June from the previous month’s 4.1%. June’s print was the lowest since May 2022 and undershot the forecasts of both the market and Norges Bank.
Lastly, consumer prices increased 0.22% over the previous month in June, contrasting the 0.15% drop logged in May.
Our Consensus expects headline inflation to average below H1 in H2. Despite anticipating an acceleration in Q3 from Q2, our panel sees the disinflation process resuming in Q4. Stronger-than-anticipated wage and private consumption growth pose upside risks to the outlook.
Looking further ahead, inflation will decelerate through our forecast horizon, but it is not seen averaging at Norges Bank’s 2.0% target until 2028.