The trajectory of consumer price inflation in Norway saw a significant deceleration in 2024, laying the groundwork for potential interest rate reductions in March, as suggested by senior economic analysts.
After an extended period of elevated inflationary pressures, recent statistics from Statistics Norway (SSB) released on Friday morning reveal a marked slowdown in price growth. This moderation has been primarily attributed to a decline in electricity prices, which played a pivotal role in easing overall inflation.
Food Prices Remain a Driving Force Behind Inflation
The upward trend in the prices of food and non-alcoholic beverages remains a key determinant in the calculation of overall inflation by SSB.
During 2024, the prices of food and non-alcoholic beverages increased by 5.3 percent, with fish and seafood experiencing an even steeper rise of 8.1 percent. These figures highlight a distinct trend when compared to neighboring Sweden, where price growth was comparatively subdued.
Ivar Pettersen, a food market analyst at Alo Analyse, linked the elevated food prices to Norway’s domestic food policy: greater openness to food imports would have resulted in more moderated price growth. Compared to Sweden, Norway’s current food policy is evidently contributing to heightened inflation.
Looking ahead, Pettersen predicts that food prices will continue to exert upward pressure on overall inflation, projecting an increase of 3 to 4 percent in 2025.
Encouraging Trends for Economic Stability
Inflation rates remain a critical variable for Norges Bank in determining the policy interest rate, with a long-term goal of stabilizing inflation at around 2 percent. Recent years have witnessed inflation significantly exceeding this target, exacerbated by a weakened Norwegian krone.
From December 2023 to December 2024, inflation registered a year-over-year increase of 2.2 percent—a development perceived positively by market analysts.
