Finanstilsynet’s report on loans and interest rates – news Norway – Overview of news from different parts of the country

– In Norway and several other countries, the economy is now characterized by high activity and little available resources. However, the outlook for the world economy and the Norwegian economy is very uncertain, according to Finanstilsynet’s report, Financial Outlook. The report contains, among other things, Finanstilsynet’s analysis and risk assessment of financial stability in the Norwegian market, and is published twice a year. The report states that the uncertainty in the Norwegian market is largely due to disruptions in the supply chains. – Among other things, the corona pandemic and the war in Ukraine have weakened the growth prospects and contributed to a sharp increase in global inflation, it says. In Norway, house prices and debt in particular are the biggest vulnerabilities. – Many households have very high debt in relation to income and the value of the home. These are vulnerable to loss of income, increased lending rates and falling house prices, says Director of Financial Supervision Morten Baltzersen. Finanstilsynet emphasizes that the debt burden in Norway is historically high, also compared with other countries. Interest rates to rise During the corona pandemic, interest rates were historically low, and it was not until the autumn of 2021 that the key policy rate was raised again. Then from zero to 0.25 percent. Since then, Norges Bank has implemented two more interest rate hikes, and the key policy rate at the time of writing is 0.75 per cent. In its latest Monetary Policy Report, Norges Bank announces that the key policy rate will increase further, and by the end of 2023 it is expected that the key policy rate will be 2.5 per cent. This corresponds to a mortgage interest rate of about 4 percent. In addition, winter electricity prices were at a record high level, and despite support schemes, this will probably be noticeable for an average household. Fuel prices have also skyrocketed, and new records have been set at more than NOK 27 per liter of petrol.



ttn-69