Let me clear it up straight away: yes, we have all had tighter finances during the year. We have paid more in electricity bills, for food and not least in loan interest or rent. There is less money left in the account now than a year ago. It does not feel particularly good, and has led to many people having to make large and small financial adjustments. Some have it very bad For certain groups, who had very little from before, the sharp increase in prices has pushed them into a far more demanding life situation. In some cases, the benefits or salary are not enough. For example, news has told many stories about people who have to turn off the electricity or eat slices of bread for dinner. Research from Oslo Met shows that 130,000 Norwegian households are in “serious financial difficulties”, and that many have to choose between paying for electricity or food. One in twelve households state that they either pay for meals, visit food stations or contact NAV for help paying for food. Several need help from food centres. Here from Alta. Photo: Jonas Løken Estenstad / news The vast majority are in work Nevertheless, it may be useful to remind that these strong stories do not represent the majority of the population. Because things are not all black. Only 1.6 percent of the able-bodied part of the population is without a job. This means that 98.4 per cent of us are in work. This is a historically good figure, and is one of the reasons why there is still very high pressure in the Norwegian economy right now – which is helping to drive prices further upwards. For the time being, growth in the economy is also good, although it is obvious that the Norwegian economy is heading into a period of lower growth. Unemployment will also rise. But, again, from a historically low level. Very low confidence in the future What is startling is that Finans Norge has never before measured lower confidence in the economic future in the history of the Expectations Barometer, which goes back to 1992. The Expectations Barometer measures Norwegian households’ expectations for their own and the country’s economy. And now that we are in the ultimate shopping week, namely Black Week, it may be worth noting that there has never been a lower level on the “major acquisitions” indicator. We have not yet received the figures for how the shopping has gone this week, but many have reported throughout the autumn that the more expensive items remain on the shelves to a greater extent. This week is Black Week, where there are many offers. Photo: Anna Rut Tørressen / news Chains such as Europris and others report that the fall in sales this autumn has been greatest for goods with a price tag over NOK 1,000. Nevertheless, sales of the cheaper items are still good. Abrupt change in the wallet The low economic confidence in the future is perhaps also connected to the fact that our economic situation has changed rather abruptly for the worse. Nevertheless, there may be reason to breathe with your stomach, if you look at the numbers. Figures from Nordea Markets show that things are not as bad as they seem. They have taken as a starting point an example family with a gross income of NOK 1 million, and a mortgage (annuity loan) of NOK five million. Let’s look at the family’s disposable income (in 2020 kroner), after the loan has been paid, for four years: January 2020: NOK 41,717 January 2021: NOK 44,617 January 2022: NOK 44,083 January 2023: NOK 40,935 Compared to just before the pandemic i.e. the family in question will have a reduced purchasing power of NOK 9,380 in January 2023, spread over a whole year. It is under NOK 800 a month, and under NOK 200 a week. Put a little bluntly, it is as much as four coffee lattes. Four fewer cups of coffee latte a week. Photo: Kim Jansson / news We had a very generous time If you compare January 2021 and January 2022, the reduction in purchasing power is much greater – but it must be seen in the context of the fact that those who had debt during the pandemic were very well off when interest rates fell to zero. In January 2023, the family will therefore have NOK 3,000 less to deal with than in January 2022. It is clear that such an abrupt change stings. But the figures show that we are not much worse off than we were before the pandemic. However, we find it extra painful, because for a short period it was so incredibly spacious. Bananas at the sports shop The change in our economy during the pandemic came almost overnight, but then with a positive sign. People went bananas to buy a tent, kayak or cabin. Many bought a car, and many bought bigger houses and took out more loans. Many bought a cottage during the pandemic, when interest rates fell. Photo: Per-Kåre Sandbakk / news Those who instead saved the extra money are probably happy about it today. Those who did not save will have to make some demanding adjustments – especially if you increased your debt during the pandemic. First-time buyers who have bought a home in the last couple of years will obviously notice it very well. But if the adjustment is that you stop buying goods for NOK 1,000, but rather pick up a hat for NOK 500 – then maybe it’s not quite a crisis after all.
ttn-69
