RPT-🇳🇴Cable FX Macro Weekly Note: Norway April Consumer Prices

**As seen in Risk In The Week report 05/06/23, subscribe at cablefxm.co.uk/reports

March headline inflation accelerated to 6.2% Y/y from the prior 5.9%, this was in line with economic estimates and proves stubbornly high price dynamics when compared to the euro area countries. Core CPI rose to 6.2% Y/y from the prior 5.9%, the figure came to match expectations. Food prices saw the largest decline since December at -1.7% M/ m, transport prices increased by 1.3% M/m vs the prior 0.8%, clothing posted a sharp rise of 5.8% M/m. The recent slide in the NOK has not helped import prices, the NOK bottomed the G10FX during the first quarter of the year, down 6.4% vs the dollar. A recent survey compiled by Bloomberg showed economists lifting its 2023 CPI projection to 4.8% Y/y from the prior 4.5%. The same survey saw economists revising the Norges Bank policy rate higher across the forecast horizon, the median terminal rate is now seen at 3.50%, this is 25bps higher than the prior. The desk at SEB also raised their inflation projections on the back of the decline in the NOK, they noted that the inflation outlooks holds upside risks. SEB also highlighted the decline in food prices attributed to a price war from wholesalers and expects producer prices to feed into consumer inflation over the next 6 months. Analysts at Nordea now stand higher than the consensus for the Norges Bank peak rate forecast, they recently lifted its projection to 4.0% on the back of higher wages and a softer krone.