Norway’s Inflationary Pressures Slow in January

Talking Points:

• CPI slows to 2.0% in January from 2.1% in December
• PPI stands at -12.4% (y/y) provided a 4.5% decrease (m/m)
• EURNOK trades in downward trending channel

Inflationary pressures slowed in January, with changes in producer prices more pronounced than that of consumers. While year-over-year growth in CPI faded from 2.1% in December to 2.0% in January, PPI fell more drastically from -7.9 to -12.4 percent. For both indices the greatest negative impact stemmed from regressed energy prices.

Heavily influence by a7.4% decline in clothing/footwear and a 14.2% decline in airfares, CPI fell 0.1% month-over-month from December to January. The index was prevented from further decline due to a 0.9 percentage point increase in the price of food and non-alcoholic beverages as well as a 1.5 percent increase in automobile prices.

Year-over-year, the single most important benefactor to CPI’s 2.0% progression was an increase in the price of imputed rentals for home owners (+2.4%) and transport services (+10.1%). The greatest negative influence came from fuel prices (-8.0%) and the price of clothing (-3.5%).

Also influencing the PPI, refined petroleum, chemical and pharmaceutical products; their prices fell by 9.8% bringing the index down by 4.5% m/m. This category also contributed to the 12.4% (y/y) drop in the PPI as did the 23.0% decline in the price of extraction and related services. Partially offsetting the decline, a 25.7% increase in the price of basic metals.

EURNOK Daily Chart

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