OSLO (Reuters) – Norway's inflation rate slowed more than expected in December, Statistics Norway (SSB) data showed on Friday, supporting forecasts that interest rates will begin to fall this year.
Core inflation, which excludes energy prices and taxes, stood at 2.7% annually, down from 3.0% in November and below the 2.8% expected by analysts in a Reuters poll.
Norges Bank expected core inflation to rise to 2.8%.
Norges Bank in December kept interest rates at a 16-year high of 4.50% and said it planned to cut rates three times in 2025, down from the four cuts previously seen, with the first reduction expected in March.
The central bank, which targets core inflation at 2.0%, said at the time it expected the policy rate to drop to 3.75% by the end of 2025, beating expectations of a global monetary easing.
Norge Bank is scheduled to make its next policy announcement on January 23.
The price of food and alcoholic beverages increased by 4.0% annually, which contributed significantly to inflation, SSB data showed.
Headline inflation, which includes changes in energy costs and taxes, was reduced in December to 2.2% from 2.4% in November, while analysts in a Reuters poll had expected a reading of 2.5%.