Explain how the data in Extract D (Figures 1 and 2) show why the Norwegian central bank (Norges Bank) may have been considering a further cut in its policy rate of interest.
Extract D
Figure 1: Annual real GDP growth rates (%) for Norway, 2018–2023
| Year | Annual real GDP growth rate (%) |
|---|---|
| 2018 | 3.1 |
| 2019 | 2.5 |
| 2020 | 1.8 |
| 2021 | 1.2 |
| 2022 | 0.7 |
| 2023 | 0.3 |
Figure 2: Consumer price index (CPI) for Norway, 2018–2023 (June 2019 = 100)
| Date | CPI index |
|---|---|
| 31 Dec 2018 | 98.20 |
| 31 Dec 2019 | 100.40 |
| 31 Dec 2020 | 101.80 |
| 31 Dec 2021 | 102.71 |
| 31 Dec 2022 | 103.12 |
| 31 Dec 2023 | 103.32 |
