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MONEY

All the changes in Norway in August that affect your finances

More free child care and a tweaked energy subsidy scheme are among the changes which could have an impact on your wallet in Norway in August.

Pictured is a person using a smart meter.
There are a number of changes in August which could affect your finances. Pictured is a person using a smart meter.Photo by Arthur Lambillotte on Unsplash

Free kindergarten for children in northern Norway

Free Kindergarten places will be given to all children in Finnmark and Nord-Troms in northern Norway. The scheme will save a family with two kids in kindergarten around 60,000 kroner per year.

Nationwide, families with three children in daycare at the same time will receive free kindergarten for the third child. This will apply to some 3,000 children in Norway. The free childcare for the third child will save families roughly 30,000 kroner per year.

Afterschool care extended

The government will provide 12 hours of free afterschool care (SFO) to children in the 2nd stage from the start of August.

The 12 hours of SFO is the equivalent of a part-time place, which costs 1,924 kroner per month. This will save households more than 20,000 kroner per year.

Free SFO has already been applied to children in the first stage. Following the scheme’s introduction, the number of children participating in SFO increased to 92 percent.

Some 60,000 pupils will benefit from this offer.

Changes to the energy support scheme

From August 1st, the government will change how it calculates the support it provides households for their energy bills.

The government will adapt the current scheme so that it covers 90 percent of the energy cost, over 70 øre per kilowatt hour every hour.
Currently, the scheme uses a monthly average, which means households are not well protected against large hourly or daily fluctuations in price.
90 per cent of the energy costs over 70 øre per kilowatt hour every hour.

Student grants to be increased

For the school year 2023/2024, the student grant will be increased by seven percent. This means that the basic student loan which most students will receive will increase to 12,537 per month.

The previous basic loan was 11,717 kroner per month. The increase amounts to the biggest student grant increase for more than 15 years.

Supermarket prices could increase

Experts have predicted that Norwegian supermarkets will move away from the previous price adjustment windows, which would see prices increase twice a year, to a new model, which will see prices change dynamically.

The beginning of July, typically one of the times a year prices are raised, saw no significant movement.

However, supermarkets may choose to adjust prices in late August as summer promotions on a number of products end. A similar event happened in Norway just after Easter when promotions on over a hundred products were brought to an end by Norway’s three cheapest supermarkets.

Changes to public transport in Oslo

Ruter will introduce a cheaper monthly ticket for children and young people at the beginning of August. Young people for children and young people will now cost 299 kroner to travel in one zone, 399 kroner to travel in two zones and 499 kroner to travel in all of Ruter’s zones across Oslo and Viken.

Later in August, a summer scheme which allowed children to travel for free with an adult who has purchased a ticket will end. Children will still be able to travel for free with adults on weekdays after 6pm and on weekends.

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ECONOMY

What lower inflation in Norway means for you 

Inflation in Norway continues to slow. However, the cost of living in the country isn’t slowing as quickly as economists expected. Here’s what that means to you. 

What lower inflation in Norway means for you 

Inflation is slowing 

Norway’s Consumer Price Index, CPI, which measures changes in prices for household goods and services, has slowed yet again. 

Between April last year and the same month this year, prices in Norway rose by 3.6 percent. It marks the third time that price increases have been below four percent since the start of 2022. 

The figures, released by Norway’s national data agency Statistics Norway, mark the fourth month in a row where the 12 monthly inflation figure has been lower than the yearly figure from the month before. This means prices are rising less rapidly than before. 

“Price growth decreased for the fourth month in a row in April. Prices are still higher than they were at the same time last year for most goods and services, but they are generally rising more slowly than before,” Espen Kristiansen at Statistics Norway said. 

Food remains one of the biggest contributors to inflation 

The price of food and non-alcoholic beverages rose by 3.3 percent from March to April, according to Statistics Norway. 

Chocolate, soft drinks, coffee, and citrus foods saw the biggest price increases, which the national data agency called “unusual.” 

What wasn’t unusual, however, was the cost of food rising following Easter, when many supermarkets ran offers to compete for customers. 

“The rise must be seen in the context of the fact that large offer campaigns in connection with Easter dampened prices in March,” Kristiansen said. 

The figures for April show that food prices in Norway have increased by 6.8 percent compared to a year ago. 

The rising cost of food and drink in Norway could potentially outgrow wages this year, even if expected pay bumps will outpace forecasted inflation overall. 

Economists expected inflation to fall more 

Inflation hasn’t eased as much as some experts were expecting. Core inflation, which excludes energy prices and taxes, was measured at 4.4 percent year on year in April. This is above what economists surveyed by the newswire Reuters expected. 

Norges Bank, the country’s central bank, raised the policy rate to a 16-year high of 4.5 percent in December. The bank has said that inflation should generally be around two percent, so it has used interest rates to curb price increases. 

As inflation isn’t falling much quicker than expected, economists predict that the central bank may wait until December before slashing rates – which for consumers means that loan and mortgage repayments will remain high for the foreseeable future. 

“The fall in inflation has not been much greater than Norges Bank has thought. This, therefore, indicates that an interest rate cut may come in December instead of September,” Kjersti Haugland, chief economist at DNB Markets, told public broadcaster NRK

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