Norway’s central bank begins the rate hiking cycle amid strong growth outlook
Our 2021 mainland GDP growth forecast remains unchanged at 4.1%. With all domestic restrictions eased and the pandemic largely under control, the economy will rebound strongly this year.
What you will learn:
- Global supply chain disruptions weighing on manufacturing and elevated inflation hitting consumer purchasing power are headwinds, but the outlook remains broadly positive.
- Growth in 2022 should also come in at 4.1%.
- A remarkable recovery in employment this year has been accompanied by a rising participation rate, disguising the true health of the labour market in the headline unemployment figures.
Why an ageing population doesn’t mean soaring inflation
What’s the future for inflation? Joachim Nagel, the new president of Germany's central bank, believes the rapidly ageing global population will play a key role – ramping up pressure on prices in the medium term. While we agree slowing labour supply will stifle output growth, in his recent discussion Nagel failed to fully consider the demand side of the argument.Find Out More
Surging global food prices could drive eurozone core inflation higher
Along with energy prices, global food prices have emerged as a key driver of the eurozone's current inflationary surge. Like other advanced economies, eurozone countries tend to be less exposed to global food price fluctuations. But if persistent and combined with strong demand, high food prices could result in a higher pass-through to core inflation.Find Out More