- Inflation is approximately in line with that expected.  Underlying inflation is close to the inflation target of 2.5 per cent. Unemployment has been lower than projected and the financial market situation has improved. It is nonetheless too early to determine whether the business cycle has turned. On the whole, developments do not at present warrant a change in the interest rate, says Governor Svein Gjedrem.

The global recession is affecting the Norwegian economy, but the impact on Norway has been less severe than in many other countries. Activity has fallen at a slower rate in the US and Europe. There are also signs of growth in several countries. But even though the situation in the global economy now seems to be stabilising, experience indicates that new shocks can quickly trigger a reversal.

 - It appears that output and employment in Norway may slow somewhat less sharply than expected. New figures may change the picture, but should these developments continue, it may be appropriate to increase the interest rate earlier than projected in the previous Monetary Policy Report, says Svein Gjedrem.

For further information, see “The Executive Board’s monetary policy decision – background and general assessment”. 

• Charts and background material