Housing Market and Credit Assessment
Households
Households facing high inflation and rising interest rates
21
Household debt
Household savings
300
% of disposable
275 income
Household debt
% of disposable 300
income
20.0% of disposable
income
20.0
Household saving rate
275
17.5
17.5
250
250
15.0-
15.0
225
225
12.5
12.5
200
200
10.0
10.0
175
175
7.5
7.5
150
150
5.0
5.0
125
125
2.5
2.5
100
100
0.0
0.0
75
75
-2.5-
-Finland Denmark Norway Sweden
-Sweden
-Finland
Norway
Denmark
-2.5
50
50
-5.0
-5.0
02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
17 18 19 20 21
Source: Macrobond and Nordea
02 03 04 05 06 07 08 09 10 11 12
13 14 15 16 17 18 19 20 21
Source: Nordea and Macrobond. 2Q moving average.
Private consumption
Household savings increased dramatically during the pandemic, largely
because of a decline in spending, but have since returned to more normal
levels as consumption has increased. Despite high debt levels, Nordic
households' strong finances are expected to support economic growth.
However, rising interest rates, as well as high inflation which decreases
purchasing power, imply downside risks for private consumption.
Governments might try to soften the blow of high inflation to households
and businesses by partially compensating them for the higher prices,
which could boost consumer confidence and support households'
spending. Robust public finances increase the credibility of such
measures.
140-
140
Index, 2007 = 100
Private consumption
Index, 2007 = 100
135
135
130
130
125
125
120
120
Norway
115
115
Sweden
110
110
105
105
Finland
100
100
95
Denmark
95
07
08
09
10
11
12
13
14
15
16
17
18
19
20 21
Source: Nordea Markets and Macrobong
NordeaView entire presentation