“The continuing downturn abroad and the strong krone are
contributing to keeping inflation low and are weighing on growth in Norway.
Against this background, the Executive Board has decided to reduce the key
policy rate”, says Governor Øystein Olsen.
Even though the situation in international financial markets
has improved somewhat after the turn of the year, there are prospects of low
growth and low interest rates for a long time in most advanced economies.
Growth in the Norwegian economy is holding up, but growth projections have been
lowered somewhat. The krone is strong and inflation is projected to remain
between 1¼ – 1½ percent to the end of the year.
The analyses in Monetary Policy Report 1/12 indicate that it
will likely take several years until inflation returns to target.