Every year, thousands of tops from politics and business gather in the small mountain town of Davos in Switzerland. The slogan of the World Economic Forum is nothing less than “making the world a better place”, and if there is one thing we need right now, it is probably that. The war in Ukraine lies there as a gloomy backdrop, while the climate crisis, energy crisis and food crisis are discussed in the various discussion areas inside the congress center. Davos 2022 Photo: Cecilie Langum Becker / NRK Brief summary: everyone is worried. In both the short and long term. The most heated economic discussions we have in our homes – namely electricity subsidies, interest rate increases and public spending – suddenly seem a little less serious when you see how bad it is getting in many other countries. Let’s take a look at three of the major acute crises that are taking place globally right now: Food crisis The number of people facing an acute lack of food security is growing at an alarmingly high rate, warns the UN, among others. This is partly due to the war in Ukraine, which is one of the world’s largest producers of grain and grain products, sky-high prices for fertilizers and a very dry start to the year. Last week, the British central bank governor, Andrew Bailey, warned of “apocalyptic” food prices. UN Secretary-General António Guterres also said last week that food shortages due to the war in Ukraine could send tens of millions of people into deprivation of food security. Malnutrition and mass results The result can be malnutrition and mass results for several years to come. As the CEO of Citigroup said in a panel discussion in Davos on Monday: We can get 1.5 billion hungry people. That’s a problem. And even though it is the poorest countries that will be hit the hardest, countries such as Egypt and Brazil are also in a bad position. The authorities in countries in the “middle class” have used what they have of financial leeway, as well as emptied their reserves, through the pandemic. The closet is simply empty, writes British The Guardian. Food prices rise sharply in Norway Also in Norway, we notice the rapidly rising prices, which come on top of higher interest rates and prices for electricity and petrol. NRK has documented through several cases how prices have risen sharply also at home, with the largest price jump on food in over 40 years. Still, we are better equipped than most to cope. Calculations from the Ministry of Finance earlier this year show that Norwegians saved NOK 300 billion more in 2020 and 2021 than the average of the previous 7 years. That is NOK 50,000 per Norwegian. Extra. Most people have never had so much money available ever, although of course there are many who do not recognize themselves at all in that description. In addition, prices of vegetables, for example, are rising much faster in the euro area than in Norway. Norwegian vegetables Photo: Simon Skjelvik Brandseth / NRK While the Euro area experienced an increase of 9.5 per cent, prices increased by only 0.3 per cent in Norway. Price crisis Prices are rising sharply worldwide. In the US, inflation is 8.5 percent, the highest seen in 40 years. In the eurozone, it is over 7 percent. The question that really weighs now is how the sharp rise in prices will affect both interest rates and economic growth going forward. The two factors are closely linked, and central banks are now balancing on a tight line: on the one hand, it is important to overcome high inflation, ie inflation. Raising interest rates is the most effective tool you have for galloping prices. Prices have risen far more than had been thought realistic. On the other hand, they do not want to raise interest rates so quickly and so much that they stifle economic growth. When interest rates rise, it becomes not only expensive for us homeowners, but also more expensive for the companies that have loans. Heavy tightening on the way You can not get away from heavy tightening is on the way anyway. The US Federal Reserve is already in the process of raising interest rates, and has announced relatively large and frequent interest rate hikes in the future. In the eurozone, it was announced this week that they will start the journey up from negative interest rates now just over the summer. In a show of hands in the hall where the IMF presented its economic forecasts in Davos on Monday, more than half raised their hand when asked if they thought there would be a recession – ie negative growth in the economy. IMF chief Kristalina Georgieva in conversation with French central bank chief François Villeroy de Galhau in Davos on Monday. Photo: FABRICE COFFRINI / AFP Only a few believed in a soft landing in the economy. Many are also worried about the US government debt of a staggering 31,000 billion dollars. As interest rates rise, it will eat more and more of the budget. No Norwegian recession in progress Had one had the same show of hands in Norway, probably no one would have raised their hand. Recession is not a word that is relevant to the Norwegian economy right now. We have strong government finances, economic growth is good and inflation is far from what we see in the eurozone and the United States. In addition, we are well under way with the interest rate hikes already, and it is also only two years since it cost money to borrow money. Energy crisis Europe is in the midst of an energy crisis. The situation was bad already a year ago, when you came out of the winter with very low gas stocks. In recent years, Europe has become increasingly dependent on solar and wind energy, as climate and environmental measures to slow down and halt nuclear or coal power have been rolled out. Prices began to rise sharply last autumn, and when the war in Ukraine broke out, new records were set. Sanctions against Russia have meant that Europe must in a short time become independent of Russian oil and gas. Europe, and also many other countries, are therefore now paying a high economic cost for the war. Must endure to pay the price The message in Davos has also been that it is something one must endure. On Tuesday, NATO Secretary General Jens Stoltenberg said that it was more important to protect what we stand for, than financial gain. NATO Secretary General Jens Stoltenberg On Monday, the French central bank governor, François Villeroy de Galhau, said that we all knew from day one that this war was bad economic news. “Less growth and more inflation. This is the price we together agreed to pay for our values. It was worth paying that price. ” New opportunities for Norway For Norway, on the other hand, the war has paradoxically provided new economic opportunities. Among other things, we have turned up gas production in order to be able to deliver even more to Europe, at the same time as we also benefit from high oil prices. It is expected that the central government’s net cash flow from oil and gas will increase from NOK 289 billion in 2021 to NOK 933 billion in 2022.
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Three crises where Norway is again a different country – Expression
