Norway’s core inflation drops in Feb.

Norway’s core inflation rate dropped to an 18-month low in February, Reuters reported on Monday, citing Statistics Norway (SSB) data. This supports the central bank’s expectation of interest rate cuts later this year.

In February, core inflation, excluding energy prices and taxes, was at 4.9 per cent year-on-year, lower than the 5.3 per cent predicted by analysts.

Finance Minister Trygve Slagsvold Vedum welcomed the decline, stating that it benefits consumers and the economy. He revised its forecast for mainland GDP growth to 0.9 per cent for this year, up from the previous estimate of 0.8 per cent.

Vedum also projected a 1.6 per cent growth in mainland GDP during the upcoming year.

Norges Bank raised its benchmark interest rate to 4.50 per cent in December and indicated that it would likely remain at that level before being reduced. The Norwegian crown traded at 11.41 against the euro.

The bank projected a 5.4 per cent year-on-year core inflation for February and will release a new forecast on March 21.

Headline inflation, including energy costs and taxes, decreased to 4.5 per cent in February, SSB data showed.