MNI INTERVIEW: Steady Backdrop For Norway Pay Deals
MNI (LONDON) - Economic projections that serve as a basis for ongoing pay negotiations in Norway are likely to be little changed in the key March assessment, barring significant krone moves and changes in crude oil and other major prices, Norwegian wage settlement committee (TBU) chair Geir Axelsen told MNI.
Past experience indicates that an update on TBU’s analysis published this month, which placed 2025 inflation at 2.5% and estimated the “wage overhang”, or the gap between start and end 2024 wage growth, at 1.8%, will only vary by one or two tenths of a percent from the original, Axelsen, also director general of Statistics Norway, said in an interview.
TBU uses a three-week average for asset prices when preparing its estimates, he noted.
“When we feed those into our model, the situation can have changed ... it's too early to say. Some years, our forecast in March is the exactly same as the forecast in February," he said, adding "Typically, we have adjusted a couple of decimals up or down."
NORGES BANK FORECAST
Adding TBU's 2.5% 2025 inflation forecast and wage overhang estimate of 1.8% would suggest a wage growth anchor of 4.3% for the negotiating rounds, though Axelsen said it would not be appropriate for him to offer any figure.
Statistics Norway's latest forecast in its economic trends, to be updated in March, is also for wage growth of 4.3% this year, very close to Norges Bank's most recent 2025 annual wage growth forecast of 4.2%.
In 2024 average wage growth for all negotiating areas was 5.3%, with manufacturing in line with the mean and retail seeing slightly lower earnings at 4.9%
"It's not a big difference, and that is because the wage system is very much based on that idea that competitive industries negotiate first and establish a norm," Axelsen said.
"The negotiating partners decide on this but ... it's reasonable to believe that the same system will continue, so I wouldn't expect a big change in the way wage negotiations are agreed.”
Norwegian pay negotiations tend to produce fairly uniform outcomes across sectors, Axelsen noted.
"The different sectors are very much aligned when it comes to wage growth," he said.
The sharp decline in Norwegian inflation from recent peaks is widely expected to lead to somewhat softer pay growth, though Norges Bank has warned that wage and price inflation could remain elevated for longer than projected if the krone weakens or capacity utilisation increases.