Norway's SSB Forecasts No Rate Cuts in 2025, Holds Benchmark Steady Through 2026

• SSB has abandoned its previous forecast of rate cuts in 2025, now expecting the policy rate to hold steady through 2026
• The revision reflects persistent inflation and a weaker Norwegian krone putting upward pressure on import prices
• Norwegian households carrying variable-rate mortgages face at least two more years at current borrowing costs
• The forecast diverges from Sweden and the eurozone, where central banks have already begun easing cycles

Statistics Norway (SSB), the country's national statistics bureau, no longer expects any interest rate cuts in 2025. The revised forecast sees Norges Bank holding its benchmark policy rate unchanged through all of 2026 — a significant shift from earlier projections that anticipated easing to begin this year.

The downward revision in rate-cut expectations stems from a combination of factors that have proven more stubborn than SSB's economists anticipated. Underlying inflation in Norway remains elevated, and the Norwegian krone has weakened considerably, driving up the cost of imports and making it harder for Norges Bank to justify loosening monetary policy. A weaker krone effectively imports inflation — every container of goods priced in dollars or euros costs more in Norwegian kroner, feeding through to consumer prices that the central bank is mandated to control.

For Norwegian households, the practical consequence is severe. Norway has one of Europe's highest rates of variable-rate mortgage exposure. Unlike in the United States or parts of continental Europe, where fixed-rate mortgages dominate, most Norwegian homeowners feel rate changes almost immediately. The average Norwegian household carries debt equivalent to roughly 2.5 times its disposable income — among the highest ratios in the OECD. Two more years at current rates means two more years of mortgage payments that consume a historically large share of household budgets.

The SSB forecast also places Norway increasingly out of step with its neighbours. Sweden's Riksbank has already cut rates multiple times, and the European Central Bank has embarked on its own easing cycle. Denmark's Nationalbank, pegged to the euro, has followed the ECB down. Norway, buoyed by petroleum revenues but burdened by a weak currency, finds itself in the unusual position of being the last Nordic holdout at peak rates — flush with oil wealth at the sovereign level while households absorb the full cost of tight monetary policy at the kitchen table.

Norges Bank's next rate decision will be closely watched for any signal that the central bank shares SSB's assessment. The bank's own published rate path, last updated in March, still indicated a possible cut in the second half of 2025. If Norges Bank revises that guidance to match SSB's outlook, the last remaining hope for near-term relief disappears.

Norway's Government Pension Fund Global — the world's largest sovereign wealth fund — gained over 2.5 trillion kroner in 2024. The average Norwegian mortgage holder, meanwhile, will spend the next two years waiting for a rate cut that SSB says isn't coming.

Sources: Nettavisen