Støre about the low price increase: – Very gratifying

From May to June, prices rose by 0.2 per cent, figures show Statistics Norway (SSB).

Price growth has now moderated every month for half a year, says section manager Espen Kristiansen at Statistics Norway. Twelve-month growth in June is the lowest we have seen in over three years.

– The government’s aim is for people to get better advice. Today’s figures, which show the lowest price increase in three years, are therefore very pleasing, says Prime Minister Jonas Gahr Støre (Ap) to NTB.

However, Statistics Norway stresses that this price drop comes in the wake of a couple of years of fairly sharp price increases.

– Better financial everyday life

According to Støre, the last six months of falling price growth show that we have reached a new turning point in this country.

– Since December last year, price growth has gone from 4.8 per cent to 2.6 per cent now in June. Wages are now increasing more than prices this year. This means that we are at a turning point where people will get better advice this year, says Støre. Støre says that low price growth is also important so that the interest rate can eventually be lowered. He also sees positively that unemployment remains low.

Finance Minister Trygve Slagsvold Vedum (Sp) also believes that the development is a good indication of brighter times for the people’s economy.

– With lower prices and an expected increase in real wages in 2024, everything indicates that people will once once more experience a better economic everyday life following several demanding years, says Vedum to NTB.

Slower pace

Statistics Norway also points out that electricity prices were lower in June than at the same time last year. Despite the fact that the prices of electricity including network rent went up by 1.0 per cent from May, they were 21.6 per cent lower in June 2024 compared to June 2023.

– The picture we see in June is consistent with the picture we have seen recently, namely that prices are generally rising, but at a slower pace than before. At the same time, in the last couple of months there have been a few more categories of goods and services where the prices are lower than they were a year ago, says Espen Kristiansen.

Offers on furniture and electronic goods also contributed to dampening price growth in the last month. From May to June last year, the prices of plane tickets increased by 4.1 per cent, but this year a price drop of 0.8 per cent has been seen in the same period. All of this has contributed to reducing price growth over the past twelve months.

The prices of package tours were 3.2 per cent lower in June this year than at the same time last year and were therefore an important reason why the twelve-month growth slowed further in June.

High potato prices

At the same time, the prices of foodstuffs rose by 2.1 per cent from May to June and were therefore the most important reason why price growth ended up at 0.2 per cent in the last month. Statistics Norway highlights the prices of potatoes in particular, which rose by 12.6 per cent from May to June. The potato price was thus a whopping 28.7 per cent above the price at the same time last year. Twelve-month growth for food and non-alcoholic beverages fell from 5.4 per cent in May.

– Bad crops in Norway following the extreme weather in the summer of 2023 led to an increased need for the import of potatoes. This may have resulted in higher prices through increased transport costs and a weak krone exchange rate, says Espen Kristiansen.

The so-called core inflation (CPI-JAE), which is prices adjusted for tax changes and excluding energy goods, fell by 0.7 per cent to 3.4 per cent in June. Here, too, there has not been as large a drop in twelve-month growth from one month to the next since April 2021.