Friday, January 28

Inflation rose by 5.3 per cent in 2021

The growth in inflation continued in December.

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The case is being updated …

Total inflation rose 5.3 per cent in December, from the same month the year before.

It shows recent figures from Statistics Norway (SSB).

– In December, the twelve-month growth in the CPI ended at 5.3 per cent. The most important contributor to this is still electricity prices, even though we see that the Storting’s support scheme has a significant effect on electricity prices for households, says senior adviser Camilla Rochlenge in Statistics Norway in a statement.

In advance, it was expected that total inflation (inflation) would rise by 4.9 per cent on an annual basis in December, according to Infront TDN Direkt. In November, annual growth was 5.1 per cent.

Annual growth in core inflation ended at 1.8 per cent, which is up from 1.4 in November. Core inflation was expected to end at 1.4 per cent last year.

It is core inflation that Norges Bank normally looks at most when interest rates are set, partly because electricity and energy prices fluctuate so much. Norges Bank expected core inflation of 1.3 per cent and total inflation of 5.0 per cent in December, according to the central bank’s latest monetary policy report.

The target is core inflation of around two percent over time. Inflation above the target indicates in isolation that interest rates should be raised. At present, however, most of the development in the pandemic is overshadowed.

Power support affects

Electricity prices have been the major driver of inflation in the last months of the year.

Before the weekend, Statistics Norway emphasized that the temporary electricity subsidy from the state would affect the consumer price index from and including December.

«In the National Accounts (GDP editor’s note), the electricity subsidy scheme is regarded as a product subsidy that reduces the purchase price of electricity for households. In the same way, the support scheme in the CPI will be treated as a reduction in the measured electricity prices “, Statistics Norway wrote.

Handelsbanken Capital Markets thought in advance that total inflation would be around six percent without the electricity subsidy, according to Infront TDN Direkt.

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