Norway's Central Bank Holds Rates; Signals Easing in 2025

Norway's central bank maintained its interest rate at a 16-year high of 4.50% and plans to reduce rates three times in 2025. The bank will likely begin easing monetary policy by March 2025. The Norwegian economy remains strong due to business investments and government spending, despite global uncertainties.

Norway's central bank decided to maintain its policy interest rate at a 16-year high of 4.50% as anticipated, signaling plans to implement rate cuts starting in 2025. The move comes as it looks to stabilize inflation and ease monetary policy soon, setting potential rate reductions for March 2025.

Projected to decrease to 3.75% by the end of 2025, the rate reflects a shift from earlier forecasts of 3.50%. Despite differing from other Western central banks which have cut rates, Norway's economy remains robust due to increased business investments, higher wages, and government spending, according to analysts.

Norges Bank highlighted the uncertainties facing both global and Norwegian economies. Among the concerns are a potential U.S.-China trade war and global trade barriers' impact on growth. Yet, core inflation rates have slightly accelerated, diverging from the bank's target.

(With inputs from agencies.)