Chief Economist Kjetil Olsen: Evening calm in stormy times

“I almost have to pinch my arm. A clear, starry night with a full moon. It doesn’t get any better.”

Kjetil Olsen talks enthusiastically about a ski trip last winter. From Skytta, a small village in the southern part of Nittedal, to Lilloseter and back. A 12-kilometre journey wearing a headlamp.

He enjoys spending time in the forest and meadows throughout the year, up to several times a week. Skiing in winter; running in spring, summer and autumn. Add to that roller skiing and cycling.

“On those trips I really find peace, especially in the evening. It’s a way to blow off steam. For me it’s the ultimate way to relax,” he says.

- Why is that?

“I also need some alone time. I meet a lot of people at work,” he explains.  

Popular economist

We meet Chief Economist Kjetil Olsen on the sixth floor of Nordea’s Oslo headquarters, where he is based together with his colleagues in Nordea Markets. The open office landscape is buzzing with activity. There is a constant dialogue about movements in interest rates and currencies as well as the economic backdrop.

Kjetil Olsen is part of a small but dedicated team, together with Lars Mouland, Dane Cekov and their leader Ole Håkon Eek-Nielsen.

“This is by no means a ‘one man show’,” he says. “We discuss absolutely everything and talk all the time, testing arguments and reasonings on each other. We never publish anything until we have talked.”

At the moment, there is a lot of uncertainty in the world, and the same goes for the macroeconomic outlook. One of the most quoted economists in the Norwegian press, Kjetil Olsen is also popular among customers and colleagues alike.

“I actually feel our role is even more important now than before. The past few years have been very unusual,” he says. Pressures have mounted in step with external shocks. First a pandemic. Then war in Europe. An energy crisis. Record-high inflation and interest rate paths heading higher. Kjetil Olsen breaks all this down into understandable stories, to make everybody who listens a bit wiser and to give customers a better basis for making decisions.

“I’ve become a kind of filter for Nordea and our customers, especially the businesses that we meet. We try to explain to them what’s happening, why it’s happening and what the future outlook might be,” he says.

Passion and a knack for storytelling

- What are your key tasks as a chief economist?

“The goal is always to help strengthen Nordea’s credibility as a financial partner. We always aim to be seen as knowledgeable, credible, sensible and trustworthy. We’re always commenting on things. It’s a repetitive game. We’re not always right, but the stories we tell must be understandable. We must inspire confidence.”

Kjetil Olsen leans across the table. It’s clear he’s passionate both about his profession and his role as a chief economist. He points to passion for economics and a knack for storytelling as keys to success. 

“You always need to be on your toes. We’re constantly being bombarded with news and data. The trick is to see how events play into the big picture, to do it fast and then make it into a good story,” he says.

Meeting customers energises Kjetil Olsen the most in his job. Presentations, analyses and stories about economics that lead to dialogue and discussion.

“Then it’s really fun to be at work,” he says.

From the military to university

Growing up in Linderud in Groruddalen (Oslo), cross-country skiing was life. Kjetil Olsen trained a lot and competed for several years for Linderud IL. The club has a long tradition and has also produced Olympic winner and seasoned cross-country skier Øystein Pettersen. 

“When I was a child I dreamt about becoming a skier. Life was all about cross-country skiing until I was 20 years old,” he says.

It was a bit of a coincidence that Nordea’s chief economist started studying economics. Kjetil Olsen and a friend were both in the military when they visited the University of Oslo. Kjetil Olsen’s first choice of study was engineering, but at an open day at the university, they were both asked to take a test.

Passing the test increased his chances of getting into the university’s economics programme and not least finishing military service before time.

“It felt very nice to ‘demob,’” Kjetil Olsen says with a smile.

So the young student started studying economics at the University of Oslo. It wasn’t entirely unknown territory as Kjetil Olsen had an uncle who was an economist and the head of the Norwegian Savings Banks Association. His uncle had spoken warmly about the profession, but Kjetil Olsen didn’t know much other than it was a good education.    

“I just started and then I found myself getting more and more interested,” he remembers.

- What advice would you give young students trying to find their way in life?

“Find a study programme that engages you, that you thrive in and that you can see yourself doing for a living. It may not tick all the boxes all at once, but you have to give things a chance. But if you’re in your second or third year and you feel you’ve lost your drive, it may be time to reconsider and perhaps choose a different path. It shouldn’t just be hard work to finish your studies. It should be fun, something you’re passionate about,” he says.

Learning the ropes at Norges Bank

Kjetil Olsen started his career at Norges Bank just after the banking crisis (1988-1993), and he describes his time at Norway’s central bank as a fantastic period. The young economist joined the central bank at a time of major monetary policy changes both in Norway and internationally. He stayed there for 20 years. 

“My time at Norges Bank gave me a great deal of valuable experience,” he says. 

In the mid-1990s Norges Bank was searching for a new monetary policy framework. New analysis tools for interest rate setting and modelling had to be developed to ensure low and stable inflation for future generations.

“I took part in designing a brand new tool box. It was an exciting journey,” he says.

- Who has been an important inspiration for you throughout your career?

“I’ve been lucky enough to have had many good and life-long colleagues, but the one who has inspired and impressed me the most is Svein Gjedrem (central bank governor during two periods from 1999 to 2010). He was demanding to work for, always set high standards and was extremely knowledgeable. Gjedrem read extensively and was always up to date on everything. Challenging him, trying to come up with something he hadn’t thought of – that was something I took to heart, because it was very difficult.”

After having had several managerial roles, Kjetil Olsen ended his years at Norges Bank as an assistant director of the monetary policy department.

A changing world

A chief economist at Nordea since 2015, Kjetil Olsen has seen a lot. But the current economic challenges are unprecedented. Norway’s economy has not experienced a similar situation in several decades. High inflation is a burden for consumers and businesses alike. Efforts are now largely focused on getting price growth under control in a good way, he says. 

“Interest rates are being raised to curb economic growth. People will experience a slightly tighter economic situation, and things will take a bit of a turn for the worse. Most people are unaccustomed to adapting to this situation as we have not seen it in the past 30-40 years, either in Norway or other countries,” he says.

We need to shift into a lower gear bring down inflation, and an economic downturn will most likely occur, according to the chief economist.

“The challenge is to make the downturn smooth, not too abrupt, but effective enough to prevent inflation from taking hold,” he says.  

Kjetil Olsen also points to three other challenges that will shape the world economy in the years to come: the green transition, reverse globalisation and demographics.

“It will take massive investments to shift from fossil to renewable energy. This will have economic consequences. Globalisation, which has been a driver of the world economy, now looks set to decline slightly. Products may not continue to become cheaper going forward, and it may well be the end of an era,” he says.

Another common trend in western and industrialised countries is that populations are growing older, and there are fewer people of working age relative to retired people. 

“This demographic development is a bit tough, and it’s been going on for a while. We could end up in a situation with structural labour shortages in large areas of the economy such as health care. This may become demanding.”

All three factors will have consequences for underlying price pressures and potentially also interest rate trends over time, warns Kjetil Olsen.

“All in all, this could lead to higher underlying pressure on prices and wages than we’ve been used to – which in turn could require slightly higher interest rates longer out,” he says.

We’ve talked with Kjetil Olsen for almost an hour and the interview is nearly over. Next on his agenda are a couple of customer meetings, discussions with colleagues, new key data from the market and maybe talks with a few journalists. Before we say goodbye, the chief economist reveals his plan for the evening when he finishes work in a few hours:

“A nice trip to the forest. Probably to Lilloseter.”