Electricity prices in Norway affected the consumer price index in January

KronerPhoto: Gorm Kallestad / NTB

The consumer price index (CPI) rose by 3.2% from January 2021 to January 2022. The high electricity prices are the main reason for the rise. From December 2021 to January 2022, the CPI fell by 0.9%, according to figures from Statistics Norway (SSB).

“In January, the twelve-month growth in the CPI ended at 3.2%. The most important contributor to this is still the prices for electricity, including grid rent, but we see that the compensation scheme and the temporary reduction in the electricity tax are helping to curb the rise,” adviser at Statistics Norway Gunnar Larsson said.

Core inflation rose

The CPI adjusted for tax changes and energy goods (CPI-ATE) – also called core inflation – rose by 1.3% from January 2021 to January 2022, and fell by 0.3% from December 2021 to January 2022.

The increase in core inflation is greater than what Norges Bank expected – the central bank had expected an increase of 1.0% in January. According to economists Dane Cekov and Kjetil Olsen at Nordea, this could affect the interest rate increase from Norges Bank in March.

The difference between the changes in the CPI and the CPI-ATE shows that changes in taxes and prices of energy products contributed to raising the CPI by 1.9% in the last twelve months.

Another product group that helped to drive up inflation is fuel and lubricants – which rose by 16.4% – which is seen in connection with high oil prices and the CO2 tax.

Fall in food prices

Food and non-alcoholic beverages continue to pull in the opposite direction, with a price drop of 1.6% compared with January last year.

“Food and non-alcoholic beverages have slowed down the twelve-month growth in consumer prices for several months. The fact that food prices are falling, and not rising, shows that competition in the grocery market is helping to keep prices down,” said Vibeke Andersen, industry director for groceries at Virke.

Source : NTB Scanpix / #Norway Today / #NorwayTodayFinance

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