Nordea predicts wage growth of 3.7 % in Norway next year
Wage growth will accelerate this year – in parallel with unemployment falling further. Next year, wage growth will be as high as 3.7 per cent, Nordea predicts.
“With the increasing struggle for labour, local wage increases will accelerate. Although LO and NHO would succeed in retaining the central wage settlements, we expect that wage growth this year will end up somewhat above 3 per cent,” writes chief analyst Erik Bruce in this year’s first forecast report from Nordea Markets.
Last year, wage growth ended at an estimated just under 3 per cent, slightly above the level in the front-end settlement. Unemployment is still falling, which is the main reason why wage growth will accelerate further and reach an average of 3.7 per cent next year.
Significantly more money
With an expected inflation of 2 per cent this year and 1.9 percent next year, this indicates that the vast majority can expect significantly more money to trade, even though interest rates are increasing this year and the extra money will be going towards mortgages for those of us who have them.
The central bank has decided that the key policy rate will be raised twice this year, to 1.25 percent.
“International uncertainty, troubled markets and prospects of very low interest rates among our trading partners are also arguments for Norges Bank to proceed cautiously in the interest rate setting. We therefore only estimate two interest rate increases this year and two next year. This will mean that interest rate increases will come at a very moderate pace according to historical standards, ” writes Bruce.
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