– Out of control – NRK Norway – Overview of news from different parts of the country

The pandemic, a new shutdown in China and the war in Ukraine are sending shockwaves through the economy.

The problems are straight out of the Norwegians’ wallets. The prices are 5.4 percent higher than a year agoaccording to Statistics Norway.

The gloomy backdrop was drawn up by NHO chief Ole Erik Almlid during NHO’s annual conference. He described the biggest shift since the fall of the Berlin Wall in 1989.

– Now the shadow is back. There is war in Europe, he said.

NHO’s CEO Ole Erik Almlid sees major challenges for Norway in the future with the green shift, the security policy situation and bottlenecks in the economy.

Photo: Terje Pedersen / NTB

– Out of control

For the challenges are in line: There is a shortage of working hands, transport is more expensive, bottlenecks slows the flow of goods, and the scarcity of energy and food causes unrest.

For the first time since the 1980s, inflation has slowed globally.

– Inflation will be quite troublesome for most people. It is in a way out of control. Simply because the commodity trading systems do not work. Everything is delayed either due to covid or the war, says Ferd board chairman Johan H. Andresen.

He doubts that the new high price level will get off the ground immediately.

– Goods that previously floated freely, will now be stored in anticipation of worse times. It will drive up the prices of certain products and raw materials that are also in short supply, because they came earlier from Russia, Belarus or Ukraine. We will notice this for a long time, he says.

Think food prices will go up

Ukraine and Russia are also major food exporters. The war has given further impetus to food prices internationally, which are now 30 percent higher than a year ago, according to FNs matindeks.

But food prices in Norway have hardly increased compared to abroad. On 1 July, prices will normally increase after negotiations with suppliers.

In sum, we must expect food prices to rise. How much remains to be seen, says Reitan owner Ole Robert Reitan.

NHO's annual conference

Ole Robert Reitan in the grocery group Reitan Retail.

Photo: Terje Pedersen / NTB

Reitan believes the situation will be more stable if the war in Ukraine ends.

– But that we have reached a new price level for food, I’m pretty sure, he says.

The US stock market has fallen 27 percent

The high inflation has led central banks in the West to go from believing that the situation will calm down, to announcing that interest rates must sharply up to calm the economy.

Investors see that there will be less profit in companies in the future with more expensive interest rates, and have sold away shares in large quantities.

In Germany, the Frankfurt Stock Exchange has fallen 15 percent so far this year, while the oil-lubricated Oslo Stock Exchange has escaped with a modest fall of one and a half percent.

Especially technology companies that were to make big money with low interest rates in the future are struggling. The US stock index, Nasdaq Composite, has fallen 27 percent.

Kristin Skogen Lund is CEO of the technology company Schibsted, which has lost half its market value.

– There is so much in the economy that is out of balance. I no longer think it is as easy to correct, because the central banks have used up some of the tools they have to regulate the economy in some way. There are limits to how much money you can print. That makes me think this inflation will bite a little harder and not go over so fast, she says.

Kristin Skogen Lund, Schibsted

Schibsted top Kristin Skogen Lund says that she struggles a lot with the question of when inflation will calm down.

Photo: Silje Rognsvåg / NRK

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