Inflation, house prices and Regional network – E24
– An abnormally exciting week for Norway, says chief economist Frank Jullum about the Norwegian key indicators that await in the coming week.
The Norwegian economy dominates the calendar for the first full week of December, while the international economy looks calmer.
Three Norwegian indicators stand out in particular, according to Danske Bank’s chief economist Frank Jullum.
It begins with housing price figures on Monday, before Norges Bank’s regional network survey comes on Tuesday. On Friday, it will become clear how price growth developed nationally in November, when fresh inflation figures are released.
– An abnormally exciting week for Norway, says Jullum about the sum of these three.
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The chief economist particularly singles out the Regional network as central in view of the rental decision to Norges Bank in a week and a half.
Looking at inflation and Regional network together
The regional network report comes out four times a year, and takes the temperature of the Norwegian economy.
The companies in the surveys reported last time that they expected a fall in production in the next six months due to high cost growth and increased tenants. This single indicator will probably be the most important to look at, Jullum believes.
– Expected production growth over the next six months has been a very good leading indicator of GDP growth going forward, says the chief economist.
In addition to that, the growth prospects and salary expectations in surveys are other elements that may have an impact on what Norges Bank thinks about hiring in the future, Jullum believes.
The combination of this survey and the inflation figures will be important for the central bank, according to the chief economist.
– It looks like the growth picture is about to slow down. At the same time, inflation remains high, says the chief economist.
Price inflation in Norway climbed further to 7.5 per cent in October. At the same time, core inflation, which means price growth excluding electricity and tax changes, was 5.9 per cent. It was the fourth month in a row with a record.
Norges Bank has eased at a rapid pace over the past year, and has been clear that its main objective is to curb price inflation. At the previous meeting in early November, the interest rate was raised by a new 0.25 percentage points, to a rent of 2.50 per cent.
If there is not to be a rent increase in December, there must be both weak signals about the Norwegian economy from the Regional Network and at the same time a more cautious price increase, Jullum believes.
He still has the most faith that the inflation figures and the Regional network together will point in the direction of a new rent increase of 0.25 percentage points from Norges Bank the following week.
I believe in further housing price falls
The third Norwegian economic “highlight” in the coming week already happens on Monday morning, when Eiendom Norge releases its housing price statistics.
Housing prices in Norway have fallen this autumn, and several economists believe in a further decline in the wake of rent increases. Sara Midtgaard, senior economist at Handelsbanken, told E24 last week that they expect a bigger fall than normal.
– We can imagine a steep decline now towards Christmas, Midtgaard said on Thursday.
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The prices of Obos homes point in the same direction. The latest figures from Thursday showed a sharp drop of 4.7 per cent in Oslo and 4.2 per cent nationally.
– We know the housing market is falling. It is not so much that it ends up at the top of Norges Bank’s priority list, but rather it goes from relief to some concern for the housing market, says Jullum at Danske Bank.
Tax lists
It is not only macroeconomics that is on the program in this country.
The tax lists for 2021 will be published early Wednesday morning.
Last time, Kjell Inge Røkke took back the throne as Norway’s richest with a fortune of 19.6 billion. Salmon heir Gustav Magnar Witzøe followed in the place behind, and was the richest among those under 30.
In 2020, Trond Mohn topped the income list for the third year in a row. He earned 303 million that year.
Chinese reliefs
Internationally, the calendar is not as full in the coming week.
– A small uneventful week in terms of key figures, summarizes Erik Bruce, chief strategist at Nordea Wealth Management.
He points out that the US central bank, the Federal Reserve, is in the period where they do not make a statement ahead of the rent meeting in a week and a half.
At the same time, Bruce points out that the development around the corona restrictions in China has been something to keep an eye on, and that there is something marked that has been followed.
On Sunday evening, it became clear that the authorities letter on the restrictions in Shanghai, and in Hangzhou, which is located directly south-west of the big city, writes Bloomberg. It happens after the last week there have been demonstrations against the strict rules in the country.
– People are getting tired of the restrictions, says Bruce.