Statistics Norway has acknowledged a significant error in its October inflation calculations. The agency initially reported consumer price growth of 3.3 percent but later corrected this to 3.1 percent. The mistake stemmed from incorrect handling of Norway's new electricity subsidy scheme.
Senior economist Espen Kristiansen from Statistics Norway explained the situation. He said the error occurred because this was the first month including the new electricity pricing arrangement in official statistics. The agency had to quickly adapt its measurement methods, and this is where the mistake happened. The problem was isolated to electricity prices within the overall inflation calculation.
Norway's electricity subsidy scheme, which began October 1, allows consumers to lock in electricity at 40 øre per kilowatt-hour before grid fees and taxes. Many households in Southern Norway have chosen this option, committing to the fixed rate through 2026. Economists had expected this policy to substantially reduce inflation from September's 3.6 percent rate.
Nordea senior strategist Sara Midtgaard expressed surprise at the statistical error. She noted that while mistakes can happen, this was particularly unfortunate given the importance of accurate inflation data. Midtgaard emphasized that inflation numbers directly influence interest rate decisions and should have been correct from the start.
The specific calculation error involved double-counting the value-added tax on the electricity subsidy. One parameter contained an incorrect value, causing the inflation figure to appear higher than reality. Midtgaard suggested Statistics Norway should have provided more detailed information about how the electricity subsidy would affect inflation measurements from the beginning.
Norway's central bank primarily focuses on core inflation, which excludes energy prices and taxes. This core measure rose to 3.4 percent in October, higher than economists expected. The core inflation jump was described by some analysts as a minor inflation shock.
Despite the headline inflation correction, economists don't expect this to significantly impact interest rate outlooks. The core inflation measure remains unchanged and continues to show persistent price pressures. Chief economist Marius Gonsholt Hov described the situation as an unfortunate mistake from Statistics Norway that shouldn't substantially alter rate expectations.
The corrected inflation numbers may have some effect on January rent index adjustments. However, broader secondary effects through wage formation appear relatively limited. The incident highlights the challenges statistical agencies face when incorporating new government policies into established measurement frameworks.
This statistical revision comes during a period of heightened sensitivity to inflation data across Nordic countries. Central banks throughout the region are carefully monitoring price developments as they make crucial interest rate decisions. Accurate statistics are essential for both policy makers and market participants navigating current economic uncertainties.