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ECONOMY

Fact check: Is Norway really better off than Sweden right now?

Norway’s finance minister said Wednesday that consumers in Norway had enjoyed better economic conditions than their Swedish counterparts. So, does this claim hold up?

Published: 5 June 2024 15:58 CEST
Pictured is the Norwegian and Swedish flag side by side.
Norway's finance minister has said that consumers have enjoyed a much smoother economy in Norway than in Sweden. Photo: AFP/Joe Klamar.

Ahead of a meeting of the Nordic countries’ finance ministers on Wednesday, Norway’s finance minister, Trygve Slagsvold Vedum, said that things had been easier for Norwegians than for Swedes when it came to the economy.

“Since the last finance minister’s meeting last year, we have had a difficult time in Norway, but in Sweden it has really been rough. There, purchasing power has fallen much more than here, and unemployment is much higher,” the finance minister told the Norwegian newswire NTB.

Vedum’s interview was intended to rally optimism in Norway. He pointed to factors such as an expected real wage increase, cuts to childcare costs, and a bump to pensions and student loans as cause for optimism.

Does Vedum’s claim hold up?

Consumers’ confidence in the Norwegian economy has been low over the last few years, and market research company Opinion’s most recent survey showed there were still more people who viewed their personal finances and the economy negatively than positively.

Norway’s consumer price index (CPI), a measure of inflation, rose by 3.6 percent between April 2023 and April 2024, according to the latest figures from the national data agency Statistics Norway.

The figures for April marked the fourth consecutive month in which inflation slowed in Norway.

Inflation in Norway is also considerably lower than the peak of 7.5 percent between October 2022 and October 2021.

Prices in Sweden, meanwhile, were up 3.9 percent between April 2023 and the same month this year, figures from the Swedish data agency Statistics Sweden show. Inflation in Sweden has moderated significantly since the peak of 12.3 percent in December 2022.

Year-on-year inflation was measured at more than 10 percent for eight consecutive months between September 2022 and April 2023, but has slowed every month since January.

When it comes to work, Sweden has a higher unemployment rate than Norway. The latest figures from Sweden’s data agency show an unemployment rate of 8.9 percent. In Norway, some 4 percent of the workforce was unemployed as of April 2024.

After years of stagnant real wages (where salaries outpace inflation), workers in Norway are expected to see some positive progress. Wages are expected to rise by 5.2 percent, while inflation will be around 3.9 percent for 2024.

Earlier this year, economists at Swedbank estimated that wages in Sweden would increase by 3.7 percent in 2024. Furthermore, with the help of Statistics Sweden, the economists estimated that workers would have an average monthly salary increase of 1,300 Swedish kronor after tax cuts and inflation are accounted for. The Swedish krona and Norwegian krone are currently worth roughly the same.

Still, salaries in Sweden are, on average, lower than in Norway. At the time of writing, the most up-to-date average salary across all professions in Sweden was listed as 38,300 Swedish kronor per month.

The average salary in Norway was much higher, at 53,670 kroner per month. However, these figures are more recent (May 2024), so they will naturally be higher than Sweden’s, which are from June 2023. Additionally, Sweden generally has a lower cost of living than Norway.

READ ALSO: Do foreigners in Norway get paid less than Norwegians?

One area where Sweden’s figures are more promising than Norway’s is the key policy rate. In Sweden, the key policy rate is currently 3.75 percent, compared to 4.5 percent in Norway. Norway’s key rate isn’t expected to be cut until December 2024 at the earliest, either.

Another area where Sweden has outpaced Norway has been the strength of the Swedish krona against the Norwegian krone.

As previously mentioned, both currencies currently have roughly similar values. While the krone and the krona have struggled against other major currencies, the Swedish krona has traded for more than one Norwegian krone over the past year. In contrast, one Norwegian krone has typically been worth more than one Swedish krona in the past.

Furthermore, while Norway’s economy was performing roughly as expected, Sweden’s saw unexpected growth in the first quarter. 

READ MORE: How healthy is the Swedish economy right now?

Has the smoother economy brought Norway happiness?

The extra money in Norway isn’t everything, at least according to the annual World Happiness Report (WHR) by The UN Sustainable Development Network.

Norway was ranked the least happy of the Nordics but was still ranked seventh. Things were rosier in Sweden, however, with the country coming three places ahead of its neighbour at fourth.

However, the two countries had a separate happiness confidence rating. This is the confidence in the accuracy of the numbers. These figures placed a 95 percent confidence in Norway being between the 4th and 7th happiest country in the world.

This means that Norway’s happiness would be interchangeable or comparable with Sweden, which also had a 95 percent confidence ranking of 4th to 7th.

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MONEY

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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