OSLO: The target rate of inflation in the Norwegian economy was lowered because a transition period of phasing in oil revenues is over, the government announced. When the initial inflation target rate of 2.5 percent was introduced, Norway was just phasing oil revenue into its economy. Now, the ministry said, that period is over.
“A key argument for maintaining a higher inflation target than other countries is therefore no longer relevant,” the ministry stated. “Against this background, the inflation target for Norway is now set at 2 percent, in line with that prevailing in comparable countries.”
Norway is one of the world’s leading oil and gas producers and sends nearly all of its production from offshore to the European market, making it the region’s top supplier after Russia.
Norge Bank, the country’s central bank, said growth for the Norwegian economy was moderate and expected to remain that way into the middle of next year. In a fourth quarter survey, the government said mainland growth in gross domestic product was just under 2 percent, a level indicative of healthy growth, for the last three quarters.
Norge Bank Gov. Øystein Olsen has said that oil and gas has provided a “substantial boost” to Norwegian incomes. On the ministry’s inflation target, Olsen said Friday that it would not “result in significant changes in the conduct of monetary policy.”
GDP growth for Norway should be just above 2 percent through 2019. Statistics Norway, the government’s record-keeping agency, reported that prices for mining support servicing, including those related to extraction, grew 9.2 percent from December.
