Calay News
Despite the increases in interest rates by central banks since the end of the pandemic, controlling inflation has become a challenging task globally. Nicolai Tangen, director of the sovereign wealth fund run by Norway’s central bank, expressed concern about the difficult task of anchoring inflation globally. Tangen attributes this complexity to multiple factors, including the increase in manufacturing prices in the context of growing interest in the sale of products manufactured close to consumers.
In addition, he highlighted the emerging relationship between weather and inflation, pointing to increases in the costs of food, such as olive oil, potatoes, and meat, which have fueled inflation. In a concrete example, he mentioned the impact of the weather on labor productivity, such as the extreme heat that has limited the ability to work during midday in Europe this summer. This climatic phenomenon has also generated a series of adverse effects, including an increase in extreme weather events that negatively affect tourism.
The month of July 2023 set records for heat and a series of fires in several countries, with the European Union’s Copernicus climate observatory noting that it was the warmest month on record in Earth’s history.
Norway’s sovereign wealth fund, the world’s largest, was worth $1.46 trillion at the end of June. These concerns about inflation and its relationship to the weather reflect the economic and environmental challenges facing nations globally today.
