The Government has set an inflation target for the monetary policy in Norway. The operational target of monetary policy is low and stable inflation, with annual consumer price inflation of approximately 2.5% over time.

Norges Bank operates a flexible inflation targeting regime, so that weight is given to both variability in inflation and variability in output and employment. In general, the direct effects on consumer prices resulting from changes in interest rates, taxes, excise duties and extraordinary temporary disturbances are not taken into account.

In real time it will always be difficult to determine which price movements are permanent and those which only have short-term effects on the Consumer Price Index (CPI). There is no one indicator that provides a precise picture of underlying inflationary pressures in all situations. Different measures of underlying inflation are discussed in the Monetary Policy Report.

The chart below shows inflation over the past years in percent and the projection for the period ahead. Inflation is measured as the year-on-year rise in the CPI and the CPI adjusted for tax changes and excluding energy products (CPI-ATE). The continuous lines illustrate the actual development in the inflation, while the broken lines illustrate Norges Bank’s projections.

CPI projections from Monetary Policy Report


CPI-ATE projections from Monetary Policy Report


Sources: Statistics Norway and Norges Bank

Monetary Policy Report with charts in Excel and HTML