Norway reports a sharp jump in its producer price index in part because of the increase in crude oil prices. File photo by A.J. Sisco/UPI |
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Dec. 11 (UPI) -- An increase in crude oil prices in November and a declining currency value against the U.S. dollar led to some inflationary pressures, Norway's government said.
The government's record-keeping against said the producer price index spiked 3.2 percent from October to November. By comparison, the U.S. government reported its PPI went up just 0.4 percent in October and the 2.8 percent gain in the 12 months ending in October was the largest increase for the world's biggest economy in more than five years.
Norway's government said the jump was largely due to the gains in crude oil prices. For Brent crude oil, the global benchmark based on a basket of oils from the North Sea, the price went up 9 percent from October to November for an average of $62 per barrel.
"In addition, a weakened Norwegian krone against U.S. dollar has contributed further when prices are measured in NOK," Statistic Norway explained in its statement Monday.
One krone was worth about 11 U.S. cents, or 0.11 U.S. dollar. That exchange is down from 0.13 on Aug. 31. The price for Brent crude oil was $63.45 per barrel early Monday.
A survey from regional contracts for Norge Bank, the country's central bank, said growth for the Norwegian economy was moderate over the last three months and expected to remain that way into the middle of next year.
"Growth has been slightly higher than enterprises expected in the previous survey," the bank said last week. "A number of enterprises indicate that activity in the oil sector is no longer declining."
The bank in November, however, recommended that the Ministry of Finance remove oil and gas stocks from the benchmark Government Pension Fund Global, arguing it would make government wealth less exposed to a "permanent drop in oil and gas prices."
The government owns shares in oil and gas major Statoil. The company reported adjusted earnings after tax for the third quarter at $2.3 billion, more than double the amount from the same period last year.
The central bank in October said the economy was struggling to pick up pace, with inflation expected to stay below 2.5 percent over the next few years. Though the labor market is gaining strength, the value of the currency, the krone, was weaker than expected and the bank said it was keeping its key policy rate at 0.5 percent.
Oil and gas equities account for around 6 percent of the government's benchmark index, or about $36.6 billion.
