On Friday morning, Statistics Norway presented economic trends providing new estimates for the Norwegian economy. This report will describe the economic situation in Norway and abroad.
– Turning point
Growth in economic activity will slow slightly, unemployment will rise and inflation will fall sharply by 2023, writes Statistics Norway. A press release.
– Now we are perhaps at a turning point. SSB researcher Thomas von Brasch says inflation should fall sharply for the rest of the year, and unemployment should rise slightly from unusually low levels.
– After years of great unrest, it seems that we are slowly moving towards normal times for the Norwegian economy again, he added.
Von Brasch says price growth is expected to slow internationally due to higher interest rates and lower energy prices. This helps reduce price pressure in Norway.
– Natural gas prices in Europe have fallen sharply from their peak in September last year. This reduces domestically imported price increases. Von Brasch says markets are hoping for lower prices for oil and electricity going forward.
Statistics Norway predicts that this trend will now reverse.
– Inflation seems to have peaked, says Thomas von Brasch.
Pressure on the labor market will also ease. Statistics Norway predicts that unemployment will increase until 2025.
– Over time, with more price pressures and increased interest rates, there is less money to spend. This results in less activity in the economy, and since unemployment is now abnormally low, we should expect it to rise somewhat in the future, says Thomas von Brasch.
SSP against current
Regarding the interest rate level and your mortgage, Statistics Norway believes that the interest rate ceiling will be raised twice by 0.25 percentage points.
– Norges Bank has justified the recent interest rate hike, saying it is important to reduce inflation. But they also have to take into account that higher interest rates will reduce activity in the Norwegian economy, leaving more people unemployed, says Thomas van Brasch.
That means a peak interest rate of 3.25 percent.
This is lower than many experts estimate. Nordea and Handelsbanken predict multiple interest rate hikes. Major banks are already confident that Norges Bank will raise the key interest rate to 3.75 percent in the summer.
Also Read: Nordea scares off borrowers
– A hike
Kirre M., Chief Economist at Sberbank 1 SR-Bank. Knudsen emphasizes that inflation is still high as of now.
– Inflation of 6.3 percent is slightly lower than market expectations. We’ve been through a period of bad news. So, it’s a boom, seen in isolation, Knudsen tells Netavisen.
Sberbank hopes for three more interest rate hikes.
– With high inflation internationally and a weak krona, I think Norges Bank will adjust its interest rate forecasts and raise three more interest rates – one in March, one in June and another in September, the economist says.
That means 3.5 interest rate peak.
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