Inflation in 2008 was significantly higher than Norges Bank projected in autumn 2007. This was to a large extent due to an unexpected slowdown in productivity growth and to the rise in prices for commodities and manufactured goods abroad being unexpectedly high through to last autumn. In addition, capacity utilisation was higher than expected up until the summer. The global financial crisis led to weaker-than-projected exports and private demand in mainland Norway. Capacity utilisation was therefore lower than expected at the end of the year. The accuracy of Norges Bank’s projections of developments in 2008 was broadly in line with those of other forecasters.