- New information has confirmed that the current global economic downturn is the deepest in the post-war period. If anything, developments have been weaker than expected, but there are also some signs of improvement. In order to mitigate the impact on the Norwegian economy, it is appropriate to reduce the key policy rate further, says Governor of Norges Bank Svein Gjedrem.

The global recession is having an adverse impact on the Norwegian economy. Developments since the March monetary policy meeting have been approximately as expected. Production continues to decline and unemployment is rising. Inflation is slowing. Lower inflation abroad and lower capacity utilisation in the Norwegian economy will exert further downward pressure on inflation ahead.

- We are setting the key policy rate at a low level in order to curb the decline in activity and prevent inflation from falling too far, says Gjedrem.

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

• Charts and background material