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Gjedrem furthest off the price goals

Norges Bank is the central bank in Europe which has missed its quantified goals of keeping the price growth stable most gravely. The central banks in Sweden, euro countries and in Great Britain are much closer to their goals.

Governor of the Central Bank Svein Gjedrem sent a comprehensive account for the low price growth to the Minister of Finance Per-Kristian Foss in September last year.

At that time the price growth equalled 0.8 percent, and Norges Bank claimed it would increase again, but in stead it fell to the ground, according to the Norwegian daily Aftenposten.

Professor Steinar Holden at the Department of Economics at University of Oslo said he is critical to Gjedrem’s work.

Holden claims that the low price growth is partly a result of the interest being too high in 2002. As a result, the Norwegian Krone became very strong and the Norwegian import rate was high.

Gjedrem also oversees production and employment in addition to the price goals, but Norway is not hitting the marks here either.

According to overviews in this fall’s national budget, Germany was the only country of Norway’s most important trading partners that had a lower growth than mainland Norway in 2002 and 2003.

Harald Magnus Andreassen, chief economist in First Securities, still claims that Gjedrem has no reason to be disappointed in the results. Andreassen stressed that there are few outside Norges Bank who views the low price growth as a problem.

Andreassen said he views it as a greater problem if Gjedrem cuts the interest even more in order to increase the price growth.

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