In the morning, Statistics Norway (SSB) came out with recent figures showing that prices in May were 5.7 per cent higher than last year. Without the electricity subsidy, the figure would have been 7.7 percent, says Thomas von Brasch in Statistics Norway. This is the highest price growth over twelve months that Statistics Norway has measured since December 1988. – It is first and foremost increased prices for electricity and fuel that make the twelve-month change in the CPI so high, says section manager Espen Kristiansen at Statistics Norway. The Consumer Price Index (CPI) shows changes in the prices of goods and services purchased by households, compared with a so-called base year. In the last year, prices have risen sharply around the world. Energy has become far more expensive, and also affects the prices of goods and services. Inflation for May is no exception, from last month prices rose by 0.2 per cent. Food prices were 3.1 per cent higher in May than a year earlier, up from a twelve-month growth of 2.1 per cent in April. Statistics Norway says that Norwegians will have a real wage decline this year, but it is still not just negative news for Norwegians, according to von Brasch. – Real wage growth will pick up in the years to come, the researcher says. Consumer Price Index (CPI) Shows changes in the prices of goods and services purchased by households, compared with a base year. The goods and services that make up most of the household budget are given the greatest weight. To see how the price of a product group develops, it is often weighted against the consumer price index, but with a value based on how large a part of the expenses the product group in question constitutes. Read more about weighting at Statistics Norway. Statistics Norway calculates the consumer price index. Believes Norges Bank must raise interest rates Core inflation is also rising. For May, core inflation is up to 3.4 per cent. Core inflation is adjusted for electricity prices and fuel prices. UP: Interest rates must go up, says Thomas von Brasch, researcher at Statistics Norway. Photo: Håkon Mosvold Larsen / NTB scanpix – Interest rates must rise, because unemployment is at a record low, inflation is at a record high, says Thomas von Brasch at Statistics Norway. He believes that the interest rate will be as Norges Bank has said, there will be 8 interest rate hikes in 2023, but he believes they will happen faster than announced. – Norges Bank will probably raise the interest rate by 0.5 per cent in June, and will probably continue to raise it to 2.5 per cent next year. The price of real estate will probably fall With this picture, a normal mortgage rate will rise from around 2 per cent in 2021 to around 4 per cent in 2025, von Brasch states. – Overall, house price growth is estimated at 5.8 per cent this year. This estimate means that house prices will increase by 1 percent throughout the rest of the year, says Thomas von Brasch. There will probably be moderate house price growth in the years ahead. In 2021, house prices increased by as much as 10.5 per cent on an annual basis, but the growth rate slowed throughout the year. – Increased supply of housing in combination with higher interest rates contributes to curbing house price growth, so that real house prices will probably fall slightly in the years to come, says Thomas von Brasch. HOUSING: Statistics Norway estimates that house prices will increase by 1 per cent throughout the rest of the year Photo: Simon Skjelvik Brandseth / news On the way to a boom The Norwegian economy is on the way to a boom. At the same time, inflation is at a record high. This indicates a rapid rise in interest rates in the time ahead. Combined with subdued prospects internationally, this will slow down growth in Norway, writes Statistics Norway. Inflation is now estimated at 4.7 per cent for the year as a whole, which is an upward adjustment of 1.4 percentage points from the forecasts published by Statistics Norway in March. – The combination of interest rate increases and lower international growth prospects will dampen activity in the Norwegian economy in the future. Therefore, the boom we are heading into will not be particularly strong, and we estimate a moderate growth in the years ahead, says Thomas von Brasch.
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Highest price increase since 1988 – news Norway – Overview of news from different parts of the country
