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The unusually high dynamics of food prices, combined with the continuation of the upward trend in fuel prices, characterized the KPI in June.
The Consumer Price Index (KPI) increased by 6,3 percent. from June 2021 to June 2022. This is 0,6 percentage points more than the twelve-month change in May, which was already at a very high level.
– In June it is mainly about growth fuel prices and food gave us further growth. Food prices have risen extremely sharply, says department head Espen Kristiansen of Statistics Norway in a press release.
Soaring food prices in Norway
Food prices increased by 5,6%. from June 2021 to June 2022. From May to June this year. increased by 2,0 percent.
- Such a large increase in food prices from May to June is remarkable. Typically, we see the biggest movements in food prices in February and July, which are time windows where suppliers can adjust prices to meet food needs, Kristiansen says. According to the Norwegian Statistical Office, meat, bread and cereal products are the biggest contributors to the XNUMX-month growth. However, from May to June, fruit price increases are the biggest contributor, given the high supply activity in May, explains Kristiansen.
High core inflation
At the same time, core inflation (inflation excluding electric energy and tax changes, abbreviated KPI-JAE) increases to 3,6 percent.
- The increase in base prices as measured by the KPI-JAE index is also currently high. The highest twelve-month increase we've measured since we started this calculation in 1995 is 3,7 percent, so we're just below, says Kristiansen.
It was expected in advance that total inflation in June would increase by 5,9%.
Inflation accelerated in the wake of the pandemic and the war in Ukraine, both at home and abroad.
This year's wage bill is based on total inflation of 3,3 percent. in 2022
Reduced purchasing power
Chief economist Marius Gonsholt Hov at Handelsbanken Capital Markets says core inflation is slightly higher than Norges Bank expected, which will push further increase in interest rates in the future.
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