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Norway’s inflation below expectations in January
February 10, 2018
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OSLO: Norwegian inflation was lower than forecast in January, weakening the crown against the euro, while the Norwegian economy grew as expected in the final quarter of 2017, data released on Friday showed.

While recent indicators, including unemployment, credit growth and manufacturing outlook have exceeded expectations, the poor inflation number poured cold water on expectations for an earlier policy tightening by the central bank.

Core inflation for January, stripping out tax changes and the cost of energy, weakened to 1.1 per cent from 1.4 per cent in December, while analysts on average had anticipated a reading of 1.5 per cent.

Norway’s crown currency weakened to 9.7685 against the euro from 9.7084 just ahead of the 0700 GMT data release.

The Norwegian central bank late last year said it planned a first rate hike in December of 2018, although analysts last week said a tightening could come earlier if growth and inflation continued to outperform expectations.

“Inflation is clearly weaker than expected. Inflation figures are volatile, especially for the start of the year and we could see changes going forward, but today’s numbers point to a later rate hike than Norges Bank has forecast,” DNB economist Kyrre Aamdal said following the latest release.

Separately, Norway’s mainland growth, a key measure that excludes volatile oil and gas production, expanded by 0.6 per cent in the fourth quarter compared to the third, in line with the 0.6 per cent predicted in a Reuters poll of economists.

Reuters

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