Bloomberg News

Norway Credit Growth Accelerated, Adding to Rate Pressures

November 04, 2011

(Updates with krone in fourth paragraph.)

Nov. 4 (Bloomberg) -- Norway’s credit growth accelerated for a third month in September to the highest since 2009, as stable unemployment, an expanding economy and low interest rates encouraged households and companies to add debt.

Annual credit growth rose to 6.7 percent in September from 6.5 percent in August, the Oslo-based statistics agency said today. Growth in household debt was 7.2 percent, unchanged from more than a 2 1/2-year high in August.

Rising credit growth is putting pressure on Norges Bank to raise its benchmark interest rate to prevent the emergence of a credit-driven housing bubble, even as the European Central Bank yesterday cut rates. Policy makers in Oslo last month pushed back planned rate increases to the second half of next year because of Europe’s debt crisis.

The krone weakened 0.2 percent against the euro to 7.7393 10:32 a.m. in Oslo. The currency lost 0.1 percent against the dollar to 5.6936.

Fitch Ratings yesterday warned that the ECB’s move increased risks of further house price rises and overheating domestic demand in Norway as policy makers keep monetary policy loose. Property prices rose an annual 9.3 percent last month, according to Norway’s Real Estate Brokers Association.

In October Norges Bank “indicated that the eurozone crisis could influence” monetary policy, Fitch said.

Norway’s policy makers will next meet on Dec. 14 to decide on interest rates. The Riksbank will meet on Dec. 20.

--Editors: Jonas Bergman, Tasneem Brogger

To contact the reporter on this story: Josiane Kremer in Oslo at

To contact the editor responsible for this story: Tasneem Brogger at

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