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Norway’s Credit Growth Accelerates for the First Time in a Year

(Statistics Norway)

(Bloomberg) -- Norway’s domestic borrowing accelerated in June for the first time in 14 months, adding to signs that the central bank may struggle to ease inflationary pressures in the energy-rich Nordic economy.

The rate of overall credit growth increased to 3.6% on year, the fastest pace since December, helped mainly by higher demand from municipalities and non-financial corporations, according to a statement from Statistics Norway on Thursday. Household borrowing accelerated for a second month, to an annual pace of 3.3%.

The data suggests that Norwegian borrowers have passed the roughest patch with inflation gradually slowing and most companies expecting output to increase through third quarter. Still, Norges Bank said in June it may need to keep borrowing costs at the highest level since 2008 for the rest of the year, citing worries including wage growth exceeding 5% for a second year in a row.

Norway’s households are the most indebted among the members of the Organization for Economic Cooperation and Development, ahead of Switzerland and the Netherlands, according to the latest available data from the club of rich nations, with debt at 253% of net disposable income as of 2022.

--With assistance from Simon Lee.

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