Things will get better, but in a few years. Norwegian institutions revise forecasts for the country

Statistics Norway (SSB) has published macroeconomic forecasts through 2029. They indicate continued price pressure in the short term. The war in the Middle East and high energy prices play a key role. At the same time, Norway's economy is expected to grow at a rate close to normal. Inflation is projected to gradually decrease in the coming years.

In 2026, inflation is expected to reach 3.2 percent. A decline to around 2 percent is forecast only by 2029. High import costs and previous wage increases are maintaining price pressure. A strengthening krone is expected to limit inflation in the coming years. The process will be gradual.

Norges Bank is taking a cautious approach to interest rates. After cuts in 2025, the rate stands at 4.0 percent. Forecasts indicate no cuts in 2026. Possible reductions are expected in 2027 and 2028. In 2029, the reference rate is projected to be 3.5 percent.

Housing investment remains at a low level. In 2023-2024, it fell by about 25 percent in total. Weak sales of new homes are limiting the sector's recovery. The expected delay in rate cuts also affects investor decisions. A more noticeable increase in activity is expected later.

Housing prices are rising despite weak supply. Forecasts indicate an increase of over 20 percent by 2029 compared to 2025. The labor market remains stable. Unemployment was 4.5 percent in 2025. By 2029, it is expected to fall to just over 4 percent, with growing demand for workers.

Norway's situation is also influenced by external factors. Rising oil and gas prices are increasing global costs. Inflation among trading partners is expected to rise to 2.5 percent in 2026. In the following years, a return to around 2 percent is expected. At the same time, the pace of economic growth abroad is expected to fall to 1.7 percent, and then accelerate again.