Europe's news in English

COPY LINK

MONEY

‘One in three’ Norwegian homes worse off than at start of 2022

The proportion of households in Norway that are struggling to make ends meet is increasing, according to new analysis.

Published: 30 July 2022 12:05 CEST

'One in three' Norwegian homes worse off than at start of 2022

An increasing number of Norwegian households are struggling with living costs. Photo by Jonas Leupe on Unsplash

In a new report, analysis institute Consumption Research Norway (SIFO) at Oslo Metropolitan University concludes that one in three homes in Norway have worse finances now than they did in January this year.

The ability to pay bills, interests and loan repayments are meanwhile cited as a problem for one in four of all households.

“We are in an expensive time, which has been building up since August last year and got stronger during the winter. We are now talking about higher prices for energy, fuel, food and higher interest,” researcher Christian Poppe told broadcaster NRK.

“The sum of this has impacts unequally and some people are hit extra hard,” he said.

Two thirds of people who spoke to researchers for the report said that they had been forced to rein in spending due to higher living costs.

Cutbacks reported include reduced use of electricity, less car use and less social activity.

21 percent said that they had reduced their food budget to make ends meet, a number that increases to 60 percent amongst those who said they had been hardest-hit.

“There are isolated warning signs in this report and the proportion of people saying they have to save on their food budget is high,” Poppe told NRK.

“There is a limit to how little you can spend on food and in some cases people already don’t have enough money for food,” he said.

Researchers spoke to a representative selection of Norway’s 2.1 million households to produce the report, which shows a significant increase in economic stress at homes compared to a similar study from July 2021.

66 percent said they are finding it difficult to pay energy bills, with those in the south of Norway more severely affected than those in the north.

Energy prices in southern Norway have been up to 131 times higher than those in the south in recent weeks, according to Nordpool figures.

The consumer price index, a measure of the cost to households of everyday goods, has increased by 6.3 percent since last summer, NRK writes.

READ ALSO:

Member comments

Log in here to leave a comment.

Become a Member to leave a comment.

How Norway has become cheaper for tourists

Norway has long held a reputation for being one of the most expensive countries in Europe.

From sky-high prices for everyday items like groceries and dining out to costly accommodation and transportation, Norwegian prices often raise eyebrows among visitors and newcomers.

READ MORE: What will be cheaper and more expensive in Norway in 2024?

The perception of Norway being unbelievably pricey is not unfounded; historically, its price levels have consistently ranked well above the European average.

Recent figures, however, indicate a potential shift in this dynamic.

The latest EU price statistics

In 2023, Norway’s price level was 25 percent higher than the average in EU countries, according to preliminary figures from the European purchasing power survey.

This marks a significant decrease from the previous year, when Norwegian prices were 43 percent above EU prices, as reported by Statistics Norway (SSB).

This decrease in price levels has implications for tourism.

As the cost differential shrinks, Norway becomes a more attractive destination for foreign visitors who may have previously been deterred by the high prices.

“The decrease in the price level in Norway compared to the rest of Europe has made it significantly more attractive for foreign tourists to holiday here with us.

“In return, it has become more expensive than before for Norwegians to holiday abroad,” Espen Kristiansen, a section manager at the SSB, said, according to the business newspaper e24.

Comparison with neighbouring countries

It must be noted that hotel and restaurant prices, which tend to be higher in Norway than in many European countries, still contribute to Norway’s overall high price level.

For these services, prices were still 43 percent higher than the EU average in 2023.

Comparatively, neighbouring Sweden’s prices were 14 percent higher than the EU average, down from 22 percent in 2022.

READ MORE: Five reasons why 2024 will be a good time to visit Norway

Denmark’s relative price level remained consistent, at 43 percent above the EU average, largely because the Danish krone is tied to the euro, unlike the Norwegian and Swedish currencies.

“Part of the explanation for the different developments in price levels in the Nordic countries is that the Danish krone follows the euro, unlike the Norwegian and Swedish ones,” Kristiansen said.

The most expensive country last year was Switzerland, with prices 74 percent above the EU average, according to the preliminary findings of the European purchasing power survey.

How a (relatively) weak krone also favours tourists visiting Norway

When travelling to Norway, tourists can still benefit from a favourable exchange rate (despite the currency’s recent uptick) even after taking inflation into account.

The weaker krone means visitors get more value for their money when exchanging foreign currency for Norwegian kroner.

READ MORE: How the weak Norwegian krone will affect travel to and from Norway

For instance, if a hotel room in Bergen costs 1,000 kroner per night, it would be around 88 euros at the current exchange rate. Three years ago, the same room would have cost approximately 100 euros.

Another example is dining out. A meal priced at 250 kroner (a main consisting of grilled salmon steak with vegetables, for example) is equivalent to 22 euros today, compared to 25 euros three years ago.

If you want a better understanding of how much cheaper a trip to Norway has become over time, you can use historical currency calculators to get a more exact estimate.

Url copied to clipboard!