To remain at this level until the end of the year (Il Sole 24 Ore Radiocor) - Oslo, 20 Jun - The Monetary Policy and Financial Stability Committee of Norges Bank, Norway's central bank, said it decided to keep the policy rate unchanged at 4.5% and is likely to keep it at this level until the end of the year, before gradually reducing it.

"Growth in the economy has slowed, and price inflation has declined. At the same time, the employment-to-population ratio is high. Inflation is still running above target, and the rapid rise in business costs will contribute to keeping inflation elevated ahead. The Committee was concerned with the possibility that if the policy rate is lowered prematurely, inflation could remain above target for too long," the central bank said.

Economic growth is projected to pick up a little in the years ahead, but unemployment is likely to edge up. Inflation is projected to decline further and approach 2% towards the end of 2027.

"There is uncertainty about future developments in the Norwegian economy. If capacity utilisation increases or the crown depreciates, wage and price inflation could remain elevated for longer. In that case, there may be a need to raise the policy rate. If unemployment rises more than expected, or price inflation declines more rapidly, the policy rate may be lowered earlier than currently envisaged," it said.

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(RADIOCOR) 20-06-24 10:10:06 (0220) 5 NNNN