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TBU believes that price growth will be 4.1 per cent this year – E24

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TBU believes that price growth will be 4.1 per cent this year – E24

The salary settlement is approaching. TBU believes that price growth will calm down more in 2024 than Norges Bank and Statistics Norway do.

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The price increase in 2024 is estimated to land at 4.1 per cent. It shows that preliminary report from the Technical Calculation Committee (TBU).

It is lower than the actual average price increase in 2023, which came to 5.5 per cent. Nevertheless, the estimate is far above Norges Bank’s inflation target of two percent.

TBU’s estimates are lower than other central players have predicted. Norges Bank estimated before Christmas that price growth would reach 4.4 per cent in 2024. Statistics Norway has predicted that it will be 4.5 per cent.

In the autumn, the government estimated price growth at 3.8 per cent in 2024.

Read on E24+

This is what you need to know about this year’s salary settlement

Before the salary settlement every year, the TBUTBUU committee that delivers reports in connection with the salary settlement every year. The reports include an overview of wage developments, developments in the Norwegian economy and estimates for price growth before the wage settlement. TBU consists of representatives from the central organizations in working life, Statistics Norway and several ministries. produce a report. There are key figures and analysis material on the Norwegian economy which should give the parties in working life the same basis to deal with in the wage settlement.

The estimate for price growth is one of the most important things TBU comes up with, because it is used to calculate what kind of real wage growth real wage growth When wages rise more than prices, workers generally have more to deal with. Wage growth and price growth thus determine whether people get increased purchasing power, or real wage growth. the settlement gives.

As usual, the committee points out that the price growth estimate is uncertain.

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“In recent months, the krone exchange rate has strengthened, and forward prices for power have decreased. The uncertainty is particularly linked to the development in the krone exchange rate, energy prices and international price growth,” says a press release.

Missed for several years

TBU has struggled to hit the mark in recent years.

The committee has significantly underestimated the rise in prices for three years in a row. Last year, they estimated price growth at 4.9 per cent, while it ended at 5.5 per cent.

There has also not been an increase in purchasing power for employees in these years, which has otherwise been common in Norway. Both 2022 and 2023 saw real wage declines, while wage growth and price growth ended the same in 2021.

Price growth has been abnormally strong during this period. It is still well above Norges Bank’s target, which has signaled that the interest rate will remain at 4.5 per cent for quite some time to come.

This year, many people estimate that there will actually be real wage growth. The Central Bank itself estimated before Christmas that wage growth will land at five per cent in 2024. Several other economists also believe in wage growth of around five per cent this year.

The employee side has been completely clear that increased purchasing power is the requirement in this year’s wage negotiations.

Strongest wage growth in the state

In addition to analyzes and forecasts for the Norwegian economy, TBU presents statistics for wage trends.

There, the committee looks both at annual wage growth as a whole, and how wages developed in various sectors such as industry, public employees, trade, finance, health and education.

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Among the major areas of negotiation shown in the report, wage growth is estimated to be strongest among state employees and teaching staff in the municipalities last year.

Public administration, municipal employees as a whole and employees in the health enterprises under the Spekter companies also all had higher wage growth than the price increase of 5.5 per cent.

For the largest negotiation areas, overall annual wage growth is estimated at 5.3 per cent from 2022 to 2023.

The real wage after tax fell by 0.4 per cent on average. The development varied between a decrease of 1.4 per cent and an increase of 0.5 in the real wage for those with an average wage within the major negotiation areas.

It is Statistics Norway director Geir Axelsen who heads the technical calculation committee for the income settlement, which is the full name of TBU. Photo: Håkon Mosvold Larsen / NTB

Chief economist: – A little dramatic

Chief economist Kjersti Haugland at DNB Markets says they are not surprised by the estimate from TBU.

– This is a slightly dramatic report, and it is positive for Norges Bank, says Haugland, referring to the fact that the central bank was hardly surprised by today’s key figures.

DNB Markets has itself estimated a relatively modest 4.2 per cent wage growth this year.

– Our estimate is also relatively recently made, so we thought then that they would end up with an estimate roughly like ours. From that point of view, this is well in line with what we had expected, says Haugland, who reminds that a new estimate will come from TBU on 12 March.

The salary overhang varies from 1.5 to 2.5 per cent for the different negotiation areas, Haugland points out.

– Our impression is that it is slightly higher than last year. All else being equal, this means that there is not as much room for additions this year. But we still expect that there will be a fairly large increase in wage growth.

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DNB’s estimate here is 5.2 per cent.

Chief economist Kjersti Haugland at DNB Markets expects “quite a large increase in wage growth” this year. Photo: Siv Dolmen

Approaching salary settlement

The salary settlement this year is a main settlement. This means that both wages and other parts of the collective agreement are negotiated.

The next steps in the settlement are for the parties to adopt their demands and positions over the next few weeks. In mid-March, the front-skill settlement will start. The front-skill settlement will start. This is done by the parties in industry exposed to competition first negotiating during wage settlements.

Here it is the LO confederation Fellesforbundet and the YS confederation Parat that meet Norsk Industri from NHO. The negotiations for industry exposed to competition lay the foundation for the other settlements that follow.

TBU will come up with a new estimate of price growth on 12 March. The committee also presents its final report before Easter.

Read more about the salary settlement here:

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NHO summit on the salary increase that did not happen: – Bad luck

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Believes public servants cannot follow the front subject this year

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Three years without better advice: – Inflation has surprised many

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Støre about the wage settlement: Understands that people expect increased purchasing power

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Vedum faces opposition: – Do not believe in recovery until the interest rate is cut

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