barriers ahead as the incoming us administration has announced higher tariffs on imports from china among other countries. increased tariffs will likely dampen global growth, but their impact will depend on the scale of potential increases in import tariffs 1 / 2 bis - central bankers'speeches and countervailing measures. the implications for price prospects, and hence for interest rate prospects, in norway are uncertain. domestic conditions may also lead to a different path for the norwegian economy than we now foresee. if the outlook changes, the policy rate path may also be adjusted. let me say a few words about the background for the policy rate decision and the committee's assessment. chart 3 growth in the norwegian economy has picked up slightly growth in the norwegian economy was weak through last year but has picked up slightly this year. activity is primarily being lifted by high public demand and large investments in the petroleum industry. at the same time, construction activity has shown a sharp decline. unemployment has risen somewhat since its lowest level a couple of years ago, but in recent months unemployment has changed little. growth in the norwegian economy is projected to be a little higher in the coming years than in 2024, partly owing to faster growth in private consumption. housing construction is expected to start picking up through spring next year, but it will likely take a long time for construction activity to return to more normal levels. chart 4 : inflation has fallen markedly from its peak inflation among trading partners has moved down towards their inflation targets, and many central banks have cut their policy rates. financial markets expect further rate cuts internationally ahead. inflation in norway has also fallen markedly from its peak and faster than projected. the main factor that has pulled down inflation is the fall in prices for imported goods. the strong krone depreciation up to summer last year has restrained the decline in inflation. inflation is still not right on the target. over the past year, consumer prices have risen by 2. 4 percent. excluding energy prices, which fluctuate widely, inflation stands at around 3 percent. wage growth has accelerated in recent years. wages rose by 5. 2 percent last year and are expected to increase at the same rate this year. wage growth is projected to slow ahead, but will still be high relative to productivity growth, which means continued high growth in business costs. this will restrain further disinflation ahead. chart 5. inflation back to target without a large rise in unemployment given the current projections, there are prospects that wages will rise faster than prices,

ida wolden bache : policy rate will likely be reduced in march introductory statement by ms ida wolden bache, governor of norges bank ( central bank of norway ), at the press conference following norway's announcement of the policy rate, oslo, 23 january 2025. * * * presentation accompanying the speech chart 1 : policy rate kept unchanged at 4. 5 percent norges bank's monetary policy and financial stability committee has decided to keep the policy rate unchanged at 4. 5 percent. norges bank is tasked with keeping inflation low and stable. the operational target is inflation of close to 2 percent over time. we are also mandated to help keep employment as high as possible and to promote economic stability. we have raised the policy rate significantly to tackle high inflation. since december 2023, the policy rate has been held at 4. 5 percent. the interest rate has contributed to cooling down the economy and to dampening inflation. the current outlook suggests that inflation will return to target without a large increase in unemployment. inflation fell further towards the end of last year and has moved closer to target. at the same time, the rapid rise in business costs is likely to contribute to stoking inflation ahead. the committee is concerned with the risk that if the policy rate is lowered too quickly, inflation could remain above target for too long. on the other hand, the committee does not want to restrain the economy more than needed to stabilise inflation around 2 percent. the committee judges that a restrictive monetary policy is still needed, but that the time to begin easing monetary policy is soon approaching. if developments turn out as we now envisage, the committee will reduce the policy rate in march. we have not made new forecasts for this monetary policy meeting but have assessed new information about economic developments against the forecasts presented in december. chart 2 : unemployment is little changed growth in the norwegian economy picked up slightly in 2024. activity has been lifted by high public demand and large investments in the petroleum industry. at the same time, housing construction has shown a sharp decline. unemployment has risen somewhat from a low level in recent years. in recent months, unemployment has changed little in line with our december projections. chart 3 : inflation has moved closer to target 1 / 2 bis - central bankers'speeches inflation has fallen markedly over the past year, and in december inflation stood at 2. 2 percent and was lower than expected. however, excluding energy prices, which fluctuate widely,