Norway to Keep Rates Unchanged to 2015 as Growth Slows, DNB Says

Norway’s central bank will probably keep interest rates unchanged until the first quarter of 2015 as an expansion slows and the krone weakens, DNB ASA (DNB) said.

The country’s mainland economy, which excludes oil, gas and shipping, will expand 2 percent this year and next year, slowing from 3.4 percent in 2012, the Oslo-based bank said in a report.

“This is the start of a more moderate growth phase for the Norwegian economy,” Kyrre Aamdal, a senior economist at DNB, wrote in the report.

Norway’s central bank in June signaled it may cut rates from 1.5 percent for the first time since March 2011 after a surging krone pushed inflation below the 2.5 percent target for 30 months. The bank will probably not cut rates next month after inflation jumped to 3 percent in July, DNB said.

Norway’s biggest lender also forecast that Sweden’s economy will grow 1.2 percent this year and 2.2 percent next year. The Riksbank will leave its benchmark unchanged at 1 percent at its next meeting and will postpone a rate increase until 2015, according to DNB. Denmark will expand 0.4 percent in 2013 and 1.7 percent next year, while Finland’s growth will remain unchanged this year and expand 2.7 percent in 2014.

To contact the reporter on this story: Saleha Mohsin in Oslo at smohsin2@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net

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