Q1 Survey Wage Expectations Roughly In Line With NB Forecast

The Norges Bank's Q1 expectations survey saw expected 2024 wage growth roughly in line with the December MPR projections, while 2025 growth was a little softer than current projections. Overall, there isn't enough of a signal to change the near-term path of policy, where rates are expected to remain at 4.5% till at least Q3 '24 (per market pricing and general sell-side consensus).

• Norges Bank forecasted wage growth at 5.0% Y/Y in 2024 and 4.3% Y/Y in 2025 in the December MPR.
• In the Q1 Expectations survey, economists expect wage growth at 5.0% Y/Y in 2024 (vs 5.1% in Q4 '23) and 4.1% Y/Y in 2025 (vs 4.4% prior).
• Social partners saw 2024 growth at 5.1% Y/Y (in line with Q4 '23) and 2025 growth at 4.2% Y/Y (vs 4.5% prior).
• Business leaders' expectations were more moderate at 4.7% Y/Y in 2024 (vs 4.6% prior) and 4.2% in 2025 (in line with Q4 '23).
• Finally, households expect their own wages and pension income growth at 3.3% Y/Y (vs 3.0% prior) in 2024.
• A reminder that last Friday (Feb 16), the Norway Technical Calculation Committee for Income Settlements (TBU) estimated 2024 inflation at 4.1% Y/Y, which was lower than NB's December forecast of 4.4%. A more precise estimate of 2024 inflation from the TBU will be released on March 12, and will form the basis for 2024 wage negotiations which start on 15 March.
• There was a larger range of inflation estimates in the survey, with economists expecting 12-month ahead inflation at 3.7% Y/Y, and business leaders expecting 4.9% Y/Y. The December MPR projected 4.4% Y/Y.