OSLO, March 21 (Xinhua) -- Norway's central bank Norges Bank increased key policy rate from 0.75 to 1 percent on Thursday, newspaper Aftenposten reported.
"The upturn in the Norwegian economy seems to be stronger than previously assumed. On the other hand, there are prospects of weaker growth and lower interest rates," the bank said in a statement.
"The forecast for the key rate indicates a slightly faster interest rate rise this year and a somewhat lower interest rate further ahead than it was projected in the previous report," it said.
According to the bank's governor Oystein Olsen, the key policy rate will most likely be increased further over the next six months.
The bank also presented new forecasts up to 2022.
Norges Bank plans to raise the key rate to 1.75 percent by the end of 2020, which is slightly lower than in the previous interest plan until 2021, Aftenposten reported.
In recent years, large interest rate cuts and long-term record low interest rates have been used to accelerate the Norwegian economy.
The oil companies gave up their investment plans in the drawer and around 50,000 have lost their job in the supplier industries since 2014.
From last year, however, oil investments have begun to rise again and this year growth will be particularly strong, Aftenposten reported.
The Norwegian economy is steadily improving, and therefore the key policy rate is set up to prevent high inflation and that people take up too big loans in banks.