Inflation has been higher than wage growth this year, but the Central Bank Governor, Øystein Olsen, isn’t sure whether Norwegians are aware that they have received less spending money.
‘It changed in 2016. Average wage growth was lower than inflation, so that people’s purchasing power actually decreased. One is a bit doubtful whether this has been registered by people yet’, said bank chief Øystein Olsen in NRK’s Political Quarterly on Wednesday morning.
Statistics Norway (SSB) and the Ministry of Finance envisages that purchasing power will fall by, respectively, 1.2 and 1.0% this year.
Norges Bank believes inflation will more than eat up wage growth this year, and estimates that wages will rise by 2.3%, while inflation will remain at 3.6%.
`As we see it, buying power will increase slightly in 2017`, said Olsen, who pointed out that Norwegians experienced a ‘phenomenal’ increase in purchasing power in the ‘noughties’ (2000s).
Source: NTB scanpix / Norway Today