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Food prices rose in April, and for fruits and vegetables there was a sharp rise in prices.
Statistics Norway’s statistics released on Monday show that prices rose 0.4 percent from March to April. On an annual basis, prices rose 0.8 percent.
In March, price increases slowed to a low 0.7 percent in the past twelve months after a sharp drop in electricity prices last year. In April last year, prices increased 0.4 percent monthly, but 2.9 percent annually. A typical April increase in recent years has been 0.2-0.4 percent.
Also read: Believe the crown will hit back hard
5-6 percent
Statistics from Norway writes that one of the main contributors to the improvement was food, which showed a price increase of 1.0 percent from last month. In particular, the higher prices of fruits and vegetables led to the change, with an increase of 4.7 and 5.9 percent, respectively.
Part of this price increase is due to the weak Norwegian krone, which has contributed to a 4.3 percent rise in the price of imported agricultural products from March to April 2020. For Norwegian agricultural products, the increase in Prices was 0.5 percent in the same period. In the past twelve months, food prices have increased 4.4 percent.
Appliance prices, which include typical appliances, rose 5.3 percent in April. Below is the price increase for the different groups.
READY FURNITURE: Furniture and home goods prices had the largest price increase in April.
Photo: (SSB)
Expected increase
Prices adjusted for energy prices and tax changes, the so-called core inflation (see below), rose to 1.1 percent in April. The annual increase was 2.8%. This is a good part of the 2% target over time.
Nordea predicted in its morning report that core inflation would rise from 2.1 percent in March to 2.4 percent in April on an annual basis. This year, there was nothing common among supermarkets related to Easter, so bank experts expect higher food prices to give a solid boost to inflation.
Nordea predicts it will remain well above 2 percent in 2020. This is due to the higher prices of imported goods after the massive depreciation of the krona.
In a comment on the figures, Handelsbanken writes that, given the depreciation of the krona, it is not unreasonable to expect that the rise in prices of imported consumer goods will gradually increase. They can increase by 4-5 percent at the end of the year.
Growth is the most important
Nettavisen Økonomi asked central bank governor Øystein Olsen at a press conference last week if this goal was not important now in these crowning times. The answer was no, but now it is about starting economic growth.
In case the price increase is less than 1% this year, we must go back to 2012 to find something similar. In 2019, prices increased 2.2 percent. In its latest report, Norges Bank estimated that prices would rise 1.2 percent in 2020.
The Consumer Price Index (CPI) shows the trend in consumer prices for goods and services demanded by private households residing in Norway. The change in the CPI is a common measure of inflation.
Statistics Norway has also changed the mutual weights in the way they calculate price increases. This means that the different categories of products and services are emphasized differently than the previous ones, which may be reflected in the increase in prices.
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