Food prices pulled the CPI up

Actions taken by the Government to limit the corona outbreak have implications for the CPI in April. Services which has had close to no consumption in April makes up approximately 10 per cent of the overall CPI, measured by CPI weight. Close to 3 per cent has an estimated price based on seasonal factors. The remaining part, about 7 per cent, has an estimated price based on the price development in the overall CPI from March to April. For more information, see Corona consequences for CPI. 

Prices of imported fruit and vegetables rose CPI

The overall CPI rose by 0.4 per cent from March to April 2020. The increase was mainly caused by a rise in the prices for food, which increased by 1.0 from last month. The increase in food prices was mainly caused by higher prices on fruit and vegetables, which rose by 4.7 and 5.9 per cent respectively. Some of the price increases on fruit and vegetables can be attributed to the weakening of the Norwegian krone (NOK) as observed by an increase in prices for imported agricultural products by 4.3 per cent from March to April. The prices for Norwegian agricultural products rose by 0.5 per cent in the same period. In addition, prices for cars rose by 1.8 per cent. The estimated monthly change for the prices on international passenger transport by air and recreational trips also contributed to the measured overall rise in April.

From March to April 2020, the prices for furnishings, household equipment and routine maintenance showed an increase, in which multiple subgroups contributed to the rise. In addition, prices on books rose in April after last month’s annual market wide sales activity.

Prices for electricity pulled the CPI in the opposite direction. The electricity prices continued to fall in April. From March to April 2020, the prices for electricity including grid rent decreased by 8.3 per cent. In addition, the prices for petrol and diesel fell by 10.0 and 5.0 per cent respectively in the same period, a result of the continued fall in the oil prices.

Increased food prices

The CPI increased by 0.8 per cent from April 2019 to April 2020. The increase was mainly caused by prices on food and non-alcoholic beverages, which rose by 4.4 per cent. In addition, price increases have been measured for imputed rentals of owner-occupiers as well as furniture and furnishings, carpets and other floor carvings.

The prices for electricity including grid rent contributed to dampen the rise in the CPI, by decreasing 34.9 per cent from April 2019 to April 2020; a further decrease from the twelve-month rate measured in March 2020. Fuels and lubricants for personal transport equipment showed a decrease by 9.4 per cent in the same period, which is the lowest twelve-month rate measured for this group since July 2009.

The twelve-year growth in the CPI-ATE was 2.8 per cent in April 2020, an increase by 0.7 percentage points from March 2020. This was mainly caused by the prices for food and non-alcoholic beverages rising 0.9 per cent from March to April this year, while falling 0.8 per cent in the corresponding period last year. In addition, the price development of cars and the consumption group furniture and furnishings, carpets and other floor coverings contributed to the increase.