The latest numbers to Statistics Norway shows inflation of 5.7.
Electricity prices are rising, fuel prices are rising and a number of interest rate hikes have been announced in the near future, both in Norway and elsewhere in the world.
The United Kingdom on Thursday raised the key interest rate from 1.0 to 1.25, while it The US Federal Reserve took action on Wednesday.
According to interest rate and currency analyst at Sparebanken Vest, Remy Bilsback, what is happening now is not unnatural.
– Before covid-19, they lowered interest rates, pressed money, pressed the accelerator pedal, because they wanted to increase activity, he says.
– Now you want to slow down the activity, which is far too high. Demand is high, inflation is high, and then you have to release the accelerator pedal and apply the brake. Then the interest rate is raised. That is what we see now, he says.
– Smaller and smaller
It is therefore not unnatural to think that the average Norwegian will feel that the contents of the wallet will shrink more and more in the time to come.
– So what they do in practice is then take money from us and give us a little worse times?
– Yes, people should spend more money on interest, because they want to reduce activity. It is not the case that the central bank wants to cause very bad times, just to be able to land it so it gets a little tighter. People will probably have less and less to do over the autumn and into the new year, he says.
However, he makes no secret of the fact that it can be difficult to hit precisely.
– They can not conjure either, he says.
Higher unemployment
The analyst believes that in addition to worse times for the private economy, there will be higher unemployment.
– All surveys indicate that demand and profitability will decline. What I think is that demand will fall more than we might think, I think it’s about what is happening elsewhere in the world. It will affect the demand for Norwegian goods, he says.
Bilsback is nevertheless clear that there is no point in painting the picture black.
– There will be worse speed in the economy, but there will be no crisis, not as it looks now, he emphasizes.
Here he receives support from Roger Berntsen, head of analysis at Netfonds.
– There will be some tough roofs in the future, you have to be prepared for worse times, but the world will not fall apart, he emphasizes.
Weak krone exchange rate
Bilsback also emphasizes that the Norwegian krone will probably stay low through the summer.
– We are a small, open economy. Money that usually comes in good times is running out now. We will probably have a weak krone throughout the summer, and be able to influence those of us who may go abroad, he says.
He points out that, for example, Switzerland has now raised interest rates for the first time in 15 years.
– They are usually very concerned about their exchange rate, now they have thrown it away, and have the same problems as the rest of the world – that prices are rising disproportionately, he says.
He emphasizes that we will see central banks around the world raise interest rates steadily in the near future.
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