“There are signs that activity in the Norwegian economy is slightly higher than expected, but tensions in international financial markets have flared up again,” says Deputy Governor Jan F. Qvigstad.

Central bank key rates are close to zero in many countries and the expected upward shift in interest rates abroad has been deferred further ahead. Weak growth prospects in Europe and a strong krone are holding down inflation at a low level and restraining growth among Norwegian companies exposed to international competition. Capacity utilisation is close to a normal level, with vigorous activity in petroleum-related industries. Contacts in Norges Bank’s regional network report that activity growth has been somewhat higher than expected. Consumer price inflation has been broadly in line with projections and underlying inflation is now between 1 and 1½ percent

“In the latest Monetary Policy Report presented in March, the key policy rate was projected to remain at today’s level over the coming year. On the basis of an overall assessment of new information since that time, the picture remains broadly unchanged,” says the Deputy Governor.

For further information, see “The Executive Board’s monetary policy decision – background and general assessment” and “The Executive Board’s assessment” in the March 2012 Monetary Policy Report.

• Charts and background material