OSLO (Reuters) – Norway’s core inflation rate fell more than expected in December, Statistics Norway (SSB) data showed on Friday, supporting forecasts that interest rates will begin to decline this year.
Core inflation, which excludes energy changes and taxes, was 2.7% on the year, down from 3.0% in November and below the 2.8% analysts had expected in a Reuters poll.
Norges Bank expected core inflation to be 2.8%.
Norges Bank kept interest rates at a 16-year high of 4.50% in December and said it planned to cut rates three times in 2025, up from four cuts seen previously, with the first easing expected in March.
The central bank, which targets core inflation of 2.0%, said at the time that it expected the policy rate to fall to 3.75% by the end of 2025, dealing a blow to hopes of global monetary easing.
Norges Bank plans to make another policy rate announcement on January 23.
Food and non-alcoholic beverages prices rose 4.0% year-on-year, making a significant contribution 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 2.5%.