The Norges Bank raised its key policy rate by 25bps to 1.25% on June 20th 2019, in line with market expectations. It is the third consecutive hike since September, as economic activity continues to strengthen and underlying inflation is a little higher than the 2% inflation target. Moreover, the Norwegian economy is seen expanding stronger in the coming year than projected earlier even though prospects for weaker growth and lower interest rates abroad. The bank also signalled that the policy rate might be increased somewhat further in the course of 2019 and slightly faster in the coming year than projected earlier while the policy rate path is little changed thereafter. Inflation is projected to remain close to the inflation target in the years ahead, at the same time as unemployment remains low. Interest Rate in Norway averaged 4.06 percent from 1991 until 2019, reaching an all time high of 11 percent in September of 1992 and a record low of 0.50 percent in March of 2016.
Interest Rate in Norway is expected to be 1.25 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Norway to stand at 1.50 in 12 months time. In the long-term, the Norway Interest Rate is projected to trend around 1.75 percent in 2020, according to our econometric models.