Since the publication of the stability report last autumn, inflation has slowed somewhat in the large economies but is still significantly higher than the central banks’ inflation targets. Monetary policy has therefore been tightened further, and interest rates continued to rise. High inflation and rising interest rates mean that the forecasts for global economic development continue to be weak.
The prolonged period of very low interest rates resulted in high risk-taking on a global level, which manifested itself in part through rapidly rising debt and high prices for housing, commercial real estate and financial assets.
The strong and rapid rise in interest rates has meant that both actors on the financial markets and borrowers have needed to quickly adjust and reduce their risk-taking. Given that interest rates and financing costs can be expected to remain at higher levels for an extended period going forward, continued adjustments in terms of lower indebtedness, and in some cases also lower asset prices, are probable.