Since the October Monetary Policy Report developments in the Norwegian economy have been broadly in line with projections. The recovery in Norway and abroad has taken hold, and Norges Bank has raised the key rate in two increments to 1.75 per cent. The Executive Board’s strategy is that the key rate should be in the interval 1¼ - 2¼ per cent until the publication of the next report in March.   – We have chosen to keep the key policy rate unchanged at this meeting, says Governor Svein Gjedrem.

Inflation is now slightly below 2.5 per cent. Activity is rising, but there are still available resources in the Norwegian economy. House price inflation is high and household demand is increasing. Exports appear to be picking up somewhat faster than expected. On the other hand, petroleum investment may be lower than projected. – Unemployment is relatively low, but both employment and the labour force have decreased somewhat further than anticipated, says Governor Svein Gjedrem.

The world economy is rebounding but activity is low and unemployment is high in the US and in Europe. Growth is holding up in emerging economies, but is likely to be moderate in the US and Europe. Key rates are close to zero in many countries and are expected to remain low for some time ahead.

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

Charts and background material