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Inflation in Norway at highest level since 2008

Prices for consumers have increased by 5.4 percent across the last 12 months, bringing inflation in Norway to its highest level since 2008. 

Barcode in Oslo.
Rises in Norway rose by 5.4 percent between April 2021 and last month. Pictured is Barcode in Oslo. Photo by Jacek Dylag on Unsplash

The cost paid by consumers in Norway last month was 5.4 percent higher than prices in April 2021, according to data released by national agency Statistics Norway on Tuesday

The rise in the consumer price index (CPI) over the last year is the biggest jump in prices since 2008, and higher inflation has not been measured in April since 1988, Statistics Norway said. 

The consumer price index measures the changes in prices of goods and services purchased by households. Expenses that make up a more significant proportion of a household’s budget contribute the most towards the CPI. 

Soaring airline ticket prices and rising energy costs were the biggest contributors to increasing inflation, Espen Kristiansen from Statistics Norway said. 

Airline tickets have risen by 39 percent in price since March last year, while electricity costs increased by 14 percent. Food prices and the cost of eating out also rose. 

“A good part of the price increase is due to higher prices for petrol and electricity, but other product groups are also rising. Food prices were higher than expected in April,” Kjersti Haugland, chief economist at DNB Markets, told public broadcaster NRK

The war in Ukraine and the pandemic have contributed to rising costs. 

READ MORE: Five essential tips for saving money on food shopping in Norway

The inflation figures are higher than economists had expected in advance and well above the targets of Norway’s central bank, Norges Bank, business and financial news site, E24 reports. 

This could lead to the bank accelerating its plan to raise the key interest rate, meaning more expensive loan and mortgage repayments for consumers. 

However, there may not be complete cause for concern, Harald Magnus Andreassen from Sparebank 1 Markets told E24. 

“Norwegian price inflation is among the lowest we have seen. Wage growth is not lower than in other countries. Norwegian households are among those who have the least reasons to complain about inflation,” he told the site. 

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MONEY

Cost of living: Why food prices in Norway are going up from Friday

Shoppers' food bills in Norway will become more expensive as the prices of groceries in the country's largest supermarkets will be adjusted on Friday. 

Cost of living: Why food prices in Norway are going up from Friday

Supermarkets in Norway are likely to introduce widescale price rises on July 1st. Each year, supermarkets raise their prices twice, once in February and once in July. 

Shoppers can expect to see “noticeable price increases”, according to a group which owns two supermarket chains in Norway. 

“There is no doubt that there will be price increases, noticeable price increases,” director of business policy and government contact at Norgesgruppen, Bård Gultvedt, told newspaper VG

Why are food prices going up? 

Norgesgruppen owns the supermarket chains Meny and Kiwi. Gultvedt said that suppliers had put their prices up significantly. 

“We have experienced that the suppliers have come to us and asked for abnormally high price increases, and then we have negotiated,” Gultvedt said. 

Producer Orkla has also warned of significant price rises. 

“We are facing the most serious situation I have been in during my 31 years in the Norwegian food industry,” Håkon Mageli, executive VP of Orkla, told VG. 

Mageli pointed to higher raw material prices and a sharp increase in energy costs as to why suppliers and producers are pushing prices up. 

In the longer term, he pointed to fertilizer prices as worrying producers and suppliers. 

READ ALSO: Five essential tips for saving money on food shopping in Norway

How much will prices go up? 

The average family in Norway could end up spending 14,300 kroner more on food shopping this year due to increasing prices. 

Food prices rose by 4.5 percent earlier this year, according to national data agency Statistics Norway. Consumer economist Cecile Tvetendstrand told VG that this corresponded to a family with two adults and two kids spending an extra 7,000 kroner on food annually. 

If food prices increase by another five percent, it would add another 7,300 kroner to the average shopping bill for a family of four. 

However, how much food has risen following supermarket adjustments is currently unclear. 

Analyst Christian Anton Smedshaug from Agri Analyze has said the price for some products would rise between one to three percent, while others will see hikes of more than ten percent. 

Producer Notura has said that the price of meat and eggs will see a high price increase and that, according to an overall assessment from the company, that increases will generally be around five percent across the board.

Rema and Coop Norge SA have both announced that customers should expect rises to rise too. 

Supermarkets asked to take their share of the bill 

Minister of Agriculture Sandra Borch has asked food chains and supermarkets to not pass on all the costs to consumers. 

“It is not me as Minister of Agriculture who sets the price of food. It is set by suppliers and grocery chains. I urge and assume that they do not increase the price of food more than they have to,” Borch told business and financial site E24

The minister said that a record 10.9 billion agricultural package given to farmers to help tackle increased costs and keep farming viable without massively increasing prices was the government’s contribution to curbing food inflation. 

“The government is concerned that food prices should not rise so much. Precisely for this reason, it was important to land an agricultural settlement that is historically high,” she said. 

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