The monetary policy target is annual consumer price inflation of close to 2 percent over time.
Norges Bank uses the consumer price index (CPI) as a measure of inflation. Some prices in the CPI tend to vary widely from one period to the next, such as energy prices which can rise sharply in one period and then fall in the next. Price volatility can create noise in the picture of the underlying trend in price developments.
In order to strip out temporary inflation volatility, Norges Bank uses various indicators of underlying inflation. The main indicator of underlying inflation in Norges Bank's analyses is the CPI adjusted for tax changes and excluding energy products (CPI-ATE).
The charts below show inflation, in percent, over the past years and projections for the period ahead. Inflation is here measured as a rise in the CPI and the CPI adjusted for tax changes and excluding energy products (CPI-ATE) from the same month in the previous year (12-month rise). The solid line shows actual developments in inflation, while the broken line shows Norges Bank's projections.
CPI projections from Monetary Policy Report
CPI-ATE projections from Monetary Policy Report
Sources: Statistics Norway and Norges Bank