Norway’s Central Bank Chief Signals Economic Resilience Amid Global Uncertainty
Norway’s economy is demonstrating surprising strength despite rising global economic headwinds and persistent inflation, according to recent remarks by Central Bank Governor Ida Wolden Bache. In her annual address on February 12, 2026, Bache highlighted the nation’s robust growth and acknowledged the challenges posed by increasing global trade tensions and geopolitical instability.
Navigating a Complex Global Landscape
Bache referenced a speech by the Canadian Prime Minister, noting a world where economic integration is increasingly used as a tool for leverage, and those not at the negotiating table are often disadvantaged. Despite rising tariffs and threats of further trade restrictions, Norway’s economy has so far proven resilient. However, Bache cautioned that this positive trend is not guaranteed to continue, stating, “It is not tough to envision scenarios where the global economy is hit harder than we have seen in the last year.”
Inflation and Interest Rate Outlook
The central bank remains focused on its 2% inflation target. Recent data revealed a higher-than-expected increase in prices in January, prompting debate among economists about the future trajectory of interest rates. While the bank lowered rates slightly in the previous year, the current inflationary pressures suggest further cuts may be delayed. Bache emphasized the need to bring inflation back to the target level.
The steering rate is set by Norges Bank and influences the interest rates offered by banks on loans and deposits.
Norway’s Economic Performance: A Bright Spot
Despite global challenges, Norway’s economic growth is outpacing many other nations. Bache noted a strong increase in household consumption, both domestically and internationally. Wage growth has exceeded price increases in recent years, and employment levels continue to rise. The central bank anticipates this moderate growth to continue, with increasing purchasing power for households.
Increased Transparency from Norges Bank
A key takeaway from Bache’s address was the commitment to greater transparency within Norges Bank. The bank will initiate publishing detailed minutes from its policy meetings, providing greater insight into the decision-making process and the various factors considered by the monetary policy committee. This move has been welcomed by economists as a positive step towards increased accountability.
Marius Hov, chief economist at Handelsbanken, described the increased transparency as “a long-awaited development.”
Understanding Norges Bank’s Role
Norges Bank
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What does Norges Bank do? - Norges Bank is the central bank of Norway.
- The central bank is responsible for issuing money, regulating the money supply, and ensuring stability in the economy.
- Norges Bank also manages the Government Pension Fund Global (Oil Fund).
- Although Norges Bank is subject to the Storting (Parliament), it is independent in its role. This means that the Storting sets the framework and goals, but Norges Bank makes the professional decisions entirely on its own.
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How does Norges Bank affect you? For you as a consumer, the policy rate is very important.
It is Norges Bank that sets the policy rate.
- When Norges Bank raises the interest rate, loans become more expensive. This means people spend less money, which can contribute to lower price growth.
- When Norges Bank lowers the interest rate, loans become cheaper. This means people can spend more money, which can contribute to economic growth.
- Norges Bank also presents forecasts of how the interest rate is expected to develop in the future. In this way, both people and businesses adapt even before the interest rate changes.
Other “buttons” the central bank can press are:
- Change how much money they lend to banks, or how much deposits they take
- Determine how much cash there is and introduce new banknotes/coins into circulation.
- Buy or sell kroner in the foreign exchange market.
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Who is the central bank governor, and what does she do? - Since March 2022, Ida Wolden Bache has been the central bank governor of Norway.
- Unlike in other countries, the central bank governor in Norway also has a special task as chairman of the Government Pension Fund Global – known as the Oil Fund.
- As the top executive at Norges Bank, Ida Wolden Bache is one of the country’s most powerful people.
Frequently Asked Questions
- What is the steering rate? The steering rate is the interest rate Norges Bank sets, influencing interest rates offered by commercial banks.
- What is inflation? Inflation refers to the rate at which the general level of prices for goods and services is rising, and the purchasing power of currency is falling.
- What is core inflation? Core inflation excludes volatile items like energy and taxes to provide a clearer picture of underlying price pressures.
Stay informed about Norway’s economic developments and the decisions of Norges Bank by visiting NRK’s Norway news section.
