2 min Published: 25.08.22 — 09.00 Updated: 2 days agoOn Thursday morning, chief economist Kjersti Haugland in DNB Markets and her team of economists presented new economic forecasts.Haugland explains to DN that the estimates paint a clearly more negative picture of the Norwegian economy than before.- We think that we will have a real slowdown in the economy with weak development, especially this winter.The interest rate hikes and the high inflation figures will slow down consumption sharply, but the Norwegian economy will nevertheless come out of it quite well.Our surroundings will be hit harder, says HauglandLast Thursday it became clear that Norges Bank is raising the key interest rate by another 0.5 percentage points to 1.75 per cent.It has been ten years since the last time interest rates were this high.DNB Markets expects Norges Bank to raise interest rates again by 0.5 percentage points in September, and by a further 0.25 percentage points in both November and December.This brings the key interest rate up to 2.75 per cent at the end of the year.The economists believe that continued high price growth and significantly higher interest rates will affect households' purchasing power and predict a tough winter for households.- We expect lower inflation next year and a significant increase in wages next year, which means that we will see an increase in real wages, which will support purchasing power.It eventually helps to reverse the weak development, but in the coming years we expect that growth will be slightly below normal, says Haugland.She points out that unemployment will also gradually increase again, and price growth will decrease.- That is why we believe that Norges Bank will gradually lower the interest rate from 2.75 per cent towards the end of next year down to two per cent, says Haugland.Norges Bank has itself signaled that the key interest rate may increase to over three per cent after the summer of 2023.- We believe that interest rates will stop earlier than Norges Bank estimates due to the weakness in consumption.Norges Bank will see the cooling as they are out there and see a sustained rise in unemployment, so that the interest rate will eventually be lowered, but not down to the levels we have had until now, says HauglandHouse price growth has been particularly strong throughout the pandemic, after mortgage interest rates have been at record lows.The DNB economists expect a significant cooling in the housing market going forward.- Overall, we envision a period where housing prices will fall.It won't fall sharply, but it will fall somewhat before it flattens out.At the same time, the supply side is relatively limited, especially in Eastern Norway, which will help keep prices up even with higher interest rates, says Haugland.DNB Markets expects house price growth of 5.2 per cent this year, but that prices will remain unchanged until next year.They then envisage house price growth of just over two per cent in 2024 and 2025.Haugland points out that despite the fact that they expect the Norwegian economy to do relatively well going forward, things look worse for our trading partners.DNB Markets expects a recession in both the eurozone and the US.- The timing of the recessions will be different.We envision Europe entering an early recession now towards the end of the year.Much of the reason will be the energy shortage, which comes in addition to the inflation figures and interest rate increases.While we think the US will only end up in a recession after the New Year.Then we think that the eurozone will have been through the worst, but it depends very much on the energy crisis.With its wealth of energy, the Norwegian economy will probably escape a downturn in the economy, estimates DNB Markets.Nevertheless, the chief economist does not hide the fact that there is a great deal of uncertainty associated with the estimate.There are many uncertainty factors, such as the energy crisis and the geopolitical situation in Europe.- The central banks are the "high and dark" of the past in the fight against inflation, but we cannot rule out that they will quickly turn around much more than we estimate when recession is a fact in the USA, says Haugland.The global stock markets experienced a painful downturn in the first part of 2022. Nevertheless, the energy-heavy Oslo Børs has stayed up.- Going forward, we envision that investments in Norway will increase.We have the indications that there will be a noticeable increase in investment in the industry.Especially the mainland companies and the oil industry in the future, says Haugland. 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