As expected, the Executive Board of the Norwegian Central Bank (Norges Bank) has decided to keep the key policy rate unchanged at 1.5 percent. (Photo: Central Bank Governor Øystein Olsen)
The bank says the moderate economic upswing among Norway's trading partners is continuing. There are nevertheless prospects that policy rates abroad will be raised at an even later point in time, primarily reflecting weaker inflation expectations for Europe. Economic growth in Norway has been moderate, broadly in line with that projected in the March 2014 Monetary Policy Report, but growth may prove to be somewhat lower than projected earlier in the period ahead.
"The analyses imply that the key policy rate be held lower longer than previously projected. There are prospects that the key policy rate will remain at about today's level to the end of 2015, followed by a gradual rise. A further weakening of the outlook for the Norwegian economy may warrant a reduction in the key policy rate", says Governor Øystein Olsen.
He says the projections for the Norwegian economy show that capacity utilisation may edge down in the coming year, rising gradually thereafter. Inflation is projected to be somewhat below, but close to, 2.5% in the years ahead.