News, Price growth | Price inflation continues to slow down – but Easter campaigns led to price jumps for food

This is revealed in figures published by Statistics Norway (SSB) on Friday.

– This is a real downturn. After all, we had expected inflation to decrease more. It’s going in the right direction, but it’s moving at a mouse’s pace where we needed a few long steps, says chief economist Kyrre M. Knudsen at Sparebank 1 to NTB.

The increase of 3.6 per cent is the lowest twelve-month growth measured in April since 2021, when it stood at 3 per cent.

– Price growth decreased for the fourth month in a row in April. Prices are still higher than they were at the same time last year for most goods and services, but they are generally rising more slowly than before, says section manager Espen Kristiansen at Statistics Norway.

The prices of food and drink rose

The prices of food and drink are still a significant reason why price inflation remains high. From March to April, the prices of food and non-alcoholic beverages rose by 3.3 per cent.

According to Statistics Norway, this is an unusually high price increase for April.

– The rise must be seen in the context of the fact that large offer campaigns in connection with Easter dampened prices in March. Now we get the effect of prices rising again after being on offer, says Kristiansen.

Among the product groups that rose a lot in price in the last month, we find chocolate, coffee and various citrus fruits. The prices of food and non-alcoholic beverages were 6.8 per cent higher in April this year compared to April last year.

Unlikely with an interest rate cut this year

Senior strategist Dane Cekov at Nordea Markets points out that price growth was again lower than Norges Bank expected.

– This strengthens the prospects for a solid boost to the real wages of Norwegian workers, and we believe that real wage growth will rise by around 1.5 per cent this year. At the same time, many other factors still point in the direction of no interest rate cut this year, writes Cekov in an email to NTB.

The rise in prices is the main reason why Norges Bank has raised interest rates significantly in recent years, but it is still a long way short of the central bank’s target of an inflation of 2 per cent.

– Towards a turning point

– We want price growth to be able to continue downward at the same time as unemployment remains low. The new figures from Statistics Norway are a new confirmation that we are on the right track. We are now in a situation where wages are likely to rise more than prices. This means that people can gradually have increased purchasing power and better everyday finances. We are heading towards a turning point in the economy, says Prime Minister Jonas Gahr Støre (Ap) to NTB.

Finance Minister and Sp leader Trygve Slagsvold Vedum (Sp) also thinks Friday’s figures are good news.

– This shows that we are on the right track and towards brighter times for people’s finances. This confirms what we believe that in 2024 it looks like people will get real wage growth, and that the high price increase is on the way down. This is in line with the government’s aim for people to have better everyday finances, he tells NTB.

Electricity prices fell

Among the product groups that contributed significantly to the further decline in price growth in April, we find electricity.

– The prices of electricity, including online rent, fell by 0.7 per cent in the last month, which is well below the price increase we saw from March to April last year, when prices went up by 5.1 per cent, says Kristiansen.

The biggest price increase from March to April was for books, which rose by 13.2 per cent, followed by coffee, tea and cocoa, as well as jam, honey, chocolate and confectionery, which increased by 9.5 and 7.7 per cent respectively.

The biggest decline was the price of games, toys and hobby products, which fell by 2.1 per cent.