No change in rate path
- Downside surprises: lower inflation, signs of weakness in domestic demand, lower rates abroad.
- Housing market shows signs of weakness, but not necessarily enough to prompt Norges Bank to change its view yet
- Upside surprises: NOK is 2½% weaker
- Surprises in total suggest no change in rate path
“Norges Bank right now” is a new publication in which we compare the development in some key variables relative to the forecast made in the last Monetary Policy Report or the situation when the report was made.
The idea is to give an easily accessible overview of developments in the Norwegian economy relative to the central bank’s forecast. We also present our assessment of the net effect these surprises could have on the next rate path.
This should not be mistaken as our central bank forecast as that is also based on our view of how the economy will develop going forward. This report is only meant to highlight how the economy has surprised relatively to Norges Bank’s last forecast, both in terms of individual figures and in total.
It is rather straight forward to compare development in financial variables and in inflation with the last MPR. The output gap, which is crucial for rates, however is not published. It is to a large degree dependent on Norges Bank’s subjective view on the driver behind growth and measures for capacity utilization. We will not try to estimate the output gap, but present development in figures important for Norges Bank view on the output gap (growth, labour market, etc).
Read the full report: Market Research
Nordea