Economists believe interest rates in Norway will rise faster than expected

KronerPhoto: Gorm Kallestad / NTB

According to DNB’s chief economist Kjersti Haugland, there is reason to believe that Norges Bank will implement four interest rate hikes already this year.

Minister of Finance Trygve Slagsvold Vedum (SP) recently suggested that the government would come up with a tight budget to avoid higher inflation and the need for even higher interest rates.

Haugland told the newspaper Dagens Næringsliv that the government’s signals are wise.

However, she believes that faster interest rate hikes than initially announced are inevitable. In December, Norges Bank’s interest rate plan indicated three increases this year, but Haugland believes there will be four interest rate increases this year and two interest rate increases next year.

“Our estimate of 2% by the summer of next year seems reasonable,” she said.

Marius Gonsholt Hov, the chief economist at Handelsbanken, also believes that there will be four interest rate hikes during the year. He told E24 that repricing in the market indicates that there may be a little over 50% probability that there may be a total of five interest rate hikes in 2022.

The key interest rate is currently at 0.5%.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance

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