Norwegians earn less and spend more

savedSaved.Photo: Sara Johannessen / SCANPIX

Not since 2010, have Norwegians saved so little of their income as in the second quarter of this year. This worries the economists.

In the second quarter of this year, Norwegian households saved only 5 percent of their income, figures from Statistics Norway (Statistics Sweden) show.

Adjusted for the season, there is a decline in the savings ratio of 2.1 percentage points from the previous quarter, which is the lowest ratio since 2010, writes Klassekampen.

According to Statistics Norway, the wages are falling while consumption is growing.

Christian Anton Smedshaug, general manager of AgriAnalyse and author of the book “Debt. How the West Fooled themselves “, says Norwegians takes a lot of risk with their private economy.

“Norway has Europe’s lowest financial savings. We have little financial buffer in the form of equities, bonds and bank deposits, and it creates a major vulnerability that is serious if, for example, house prices fall sharply, he says to Klasskampen.

Smedshaug believes that we not only save too little but also incorrectly.

“The reason the savings rates have seemed alright is that we have invested a lot of money in property because of rising housing prices. However, these are assets that are not easily tapped into, and by a sharp correction to house prices household finances can be be significantly worsened, he says.

People should look for other forms of savings than property, Smedshaug believes, and recommends shares and bonds savings.

Savings ratio means the proportion of disposable income that is not used for consumption, such as bank deposits, purchase of funds or payment of mortgage payments. SSB form a part of the national accounts revue and was published September 6th.


© NTB Scanpix / Norway Today