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Six reasons to be optimistic about life in Norway in 2023

The cost of living in Norway may be on the up, but it's not all bad news, and there are a few reasons to be optimistic about the year ahead. 

Published: 5 January 2023 15:55 CET
Pictured is a dog and people enjoying the weather off of one of Oslo's islands.
Here re six things to be optimistic about in Norway. Pictured is a dog and people enjoying the weather off of one of Oslo's islands. Photo by Kamil Klyta on Unsplash

For some, the future may look bleak, and while there may not be an abundance of good news out there at the moment, there are certainly some silver linings we can look to in Norway. 

While it may feel hard to remain upbeat in the face of an increased cost of living, high energy prices and gloomy economic forecasts, we’ve put together a list to try and help you look towards the positives. 

It should be easier to get on the property market in 2023

Becoming a homeowner in Norway may be easier in 2023 than in 2022 and 2021 for several reasons. 

First, new regulations mean it will be easier to secure a mortgage this year. Applicants will be required to weather interest rate increases of three percent, rather than five percent. 

This means that a mortgage will be within the reach of more people as their finances will be less stringently tested. 

Additionally, Norway’s property market will likely see decreases in house prices in most places, making homes more affordable. 

While for existing homeowners, this will interpreted more as a negative, they can take solace in the fact that dips in house prices won’t be too severe. 

Interest rates to peak

Throughout 2022, Norway’s key policy interest rate increased fivefold to 2.75 percent. This has meant much higher mortgage and loan repayments for homeowners and borrowers. 

The upshot is that interest rates will peak in 2023 and should only increase another 0.25 percentage points if economic forecasts are to be believed. 

This means consumers won’t have to worry about the prospect of interest rates and repayments going up as rapidly in 2023. This stabilisation will make it easier for homeowners to plan their ingoings and outgoings this year. 

More travel opportunities and routes

In 2022, the travel industry began to bounce back following the pandemic, with 2023 shaping up to be an even better year for travel to and from Norway. 

Next year, the number of international flight routes to and from Norway will increase.

Loganair, Widerøe, Austrian Airlines, SAS and Norwegian are just some companies that have announced new routes and increased departures to and from Norway. 

What’s best is that there will be more connections and options from airports other than Oslo, allowing those not in the capital to enjoy increased travel options. 

READ MORE: The new international flight routes from Norway in 2023

If a potential recession hits Norway, it won’t be catastrophic

While not an entirely positive point in and of itself, we are choosing to look at the silver lining: a possible recession in Norway wouldn’t be too hard-hitting. 

Additionally, a recession for Norway isn’t currently on the cards. If other major economies worldwide head into recession, Norway may follow suit. 

“Norway is influenced by the outside world. When it’s bad out there, it’s bad in Norway too. It would not be surprising if there were a recession in Norway,” Kjersti Haugland, chief economist at DNB, told the news bureau NTB.

“Things look less dramatic right now than they did just six months ago… Yes, there will probably be a slowdown in the economy, but perhaps not very dramatically,” she added, highlighting that financial policies and support schemes have helped that things are not worse.

Inflation to slow down 

One of the biggest things that squeezed households over the past 12 months, inflation, is likely to slow down significantly in the year ahead. 

Economic forecasts believe that inflation in Norway will stabilise between two and four percent, compared to the six percent plus seen throughout 2022. 

This should allow wage growth to keep up with inflation and ensure that most workers aren’t worse off in real terms. 

At the turn of the year, several economic experts told public broadcaster NRK that the worst was behind Norway regarding interest rates and inflation. 

No risk of energy rationing

Norway is reliant on hydropower to meet the vast majority of its energy needs. However, much of 2022 saw incredibly low reservoir filling levels, leading to fears that energy would need to be rationed if the situation didn’t improve. 

Luckily the situation did improve in the latter half of 2022, and the fear of energy rationing in 2023 has more or less been eliminated thanks to reservoirs being replenished to near-normal levels by the end of 2022. 

As for electricity prices, they are expected to remain high, though. 

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How Norway has become cheaper for tourists

The recent drop in Norway's price level has made it a more appealing destination for tourists looking to visit Scandinavia without breaking the bank.

Published: 21 June 2024 17:38 CEST
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.

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