Norwegians’ decreasing faith in their own finances

Money fixed interestNorwegian bank notes, Photo: Norway Today Media

Norwegians have worse expectations of  their own finances. Fear of higher interest rates contributes to uncertainty.

The figures are presented in ‘Finans Norges’ fourth quarterly forecast barometer. After several years of strong confidence in the future, the barometer has fallen for the third quarter in a row.Women are less optimistic than men, and red-green voters are less optimistic than those who state that they are voting on today’s governmental parties.

‘’The development may indicate that households have become more uncertain. Fear of higher interest rates and increased turmoil in the world economy can explain something about the case” said CEO, Idar Kreutzer of Finans Norge.

In September,Norges Bank raised its key interest rate for the first time in seven years, from 0.50 to 0.75%.

The central bank forecast is that the key rate will gradually rise to 2% by the end of 2021,which will mean mortgage rates at just under 4% in 2021.

More will save

The fall in economic expectations is greatest in the age groups 15-29 and 30-44 years shows the barometer.

“Young people in the establishment phase often have higher loans than other sections of the population and are therefore more affected by interest rate increases. This could explain the negative impact on this segment” Kreutzer said.

If the economy in the household is getting better,the proportion that wants to save more is bigger.The share that will spend extra income on saving and repayment of loans is at the highest level since 1994.

Although people have less faith in their own finances,expectations of the country’s economy are rising compared with the previous quarter.

The expectation barometer is a quarterly collaboration between Finans Norge and Kantar TNS. The barometer measures Norwegian households’ expectations for their own and the country’s economy.

Falling unemployment

Earlier this month,Nav provided figures showing unemployment was 2.2%, compared with 2.4% a year ago.

By the end of October,61,500 were recorded as unemployed by Nav, a decrease of 4,500 compared with October last year. 48% of the fully unemployed received unemployment benefits in October showed the numbers from Nav.

So far this year, both gross unemployment and the number of unemployed have gone down, but slower than last year.It is still in Rogaland and among engineers that unemployment has fallen the most” said Nav Director, Sigrun Vågeng.


© NTB scanpix / #Norway Today