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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