Debt is on the rise among Norwegian householders. Photo: Shutterstock
The debts of Norwegian households have grown faster than their income during the last few years, making the Norwegian economy vulnerable, said a report on Tuesday.
The Financial Supervisory Authority presented the report “Finansielle utviklingstrekk 2014” (“Financial features of development 2014”) this week.
The report warns people that several kinds of shockwaves could hit the Norwegian economy and the country's finance institutions in the near future. High household debts and rising houses prices are especially factors related to a more vulnerable economy.
Finance Authority director, Morten Baltzersen, said to NTB: “What will happen ahead is uncertain.”
The Financial Supervisory Authority pointed out that most debts on mortgage in Norway have an adjustable interest rate. This means that an increase of the mortgage interest rate will quickly reduce the available income of households. Many households have more than twice their income in debt, and the same households have limited economical buffers.