OSLO (Reuters) – Norway’s core inflation rate fell more than expected in December, Statistics Norway (SSB) data showed on Friday, supporting predictions that interest rates will start to fall this year.
Core inflation, which excludes changes in energy prices and taxes, was 2.7% on an annual basis, down from 3.0% in November and below the 2.8% expected by analysts in a Reuters poll.
Norges Bank expected core inflation of 2.8%.
Norway’s bank kept interest rates at a 16-year high of 4.50% in December and said it plans to cut rates three times in 2025, up from four previous cuts, with the first cut expected in March.
The central bank, which targets core inflation of 2.0%, said at the time that it expected the benchmark rate to fall to 3.75% by the end of 2025, in a blow to hopes of global monetary easing.
Norges Bank is due to release its next benchmark rate announcement on 23 January.
The prices of food and non-alcoholic beverages increased by 4.0 percent on an annual basis, which significantly contributed to inflation, SSB data showed.
Headline inflation, which includes changes in energy costs and taxes, eased to 2.2% in December from 2.4% in November, while analysts in a Reuters poll had expected a reading of 2.5%.
