Norway Sees Record Spike in Food Prices

Swept by inflation alongside many other parts of Europe, Norway has seen a historic growth in grocery prices.

Compared to July of last year, food prices are now wholly 10.4 percent higher, placing an added burden on troubled consumers.

This July alone, food and beverage prices soared by 7.6 percent, according to Statistics Norway.

“A historically high price increase for food and non-alcoholic beverages in July was clearly the most important reason for the rise in the consumer price index in July. We have never previously measured a similar price increase for food from one month to the next in the CPI,” Espen Kristiansen of Statistics Norway told national broadcaster NRK.

Until now, the biggest price change for food and drink in a single month was recorded in July 1981 at 5.3 percent. Statistics Norway looked back at figures going as far back as 1960, but wasn't able to find any similar spikes.

The agency explained the record growth by citing cost increases in all parts of the value chain, including increased prices for raw materials, fertilizer, transport, packaging and energy. While the price of fuel decreased slightly during July, prices are still close to 50 percent higher than a year ago.

The rise in prices exceeds the recent wage increase of 3.7 percent, exacerbating problems for the most vulnerable groups and reducing purchasing power across the entire population. In a recent analysis, Consumption Research Norway (SIFO) at Oslo Metropolitan University concluded that one in three homes in Norway have worse finances now than they did in January this year.

In June, Norway's Central Bank raised the key interest rate by 0.5 percent, for the first time in 20 years. The question many are now asking is whether another interest rate jump is in store early as next week.

“The figures are much higher than the central bank had expected. This means that it will probably increase interest rates by another 0.5 percent already next week,” Nordea's chief economist Kjetil Olsen said in a forecast.

Over the past months, the West has been plagued by sweeping consumer inflation, with numerous countries ranging from the US to Hungary breaking their decades-old records. The adverse effect has been aggravated by the West's sanctions war against Russia, which, among other things, resulted in a strained situation on the energy market and caused a domino effect on price spikes.

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