How life in Norway is changing in 2023
A look at some changes for the new year
The Norwegian-based English-language news blog thelocal.no has taken a look at the upcoming changes that will affect work, education, travel, and other elements of life in Norway in 2023.
The year 2022 was a dramatic year, full of surprises and unexpected continent-level challenges. From the war in Ukraine to the cost-of-living crisis and surging energy costs, this year will go down in history as a year characterized by hardship and difficulties —even in a country as well-off as Norway.
Unfortunately, most of these crises look likely to spill over into the next year.
Following are the major changes likely to happen in 2023.
Unemployment is expected to rise
As is the case in most of Europe, Norway is facing economic uncertainty. Currently, the country’s unemployment rate is at a record low. However, experts and analysts believe that unemployment is set to rise in 2023, 2024, and 2025 as job growth in Norway flattens out.
According to a December report by Statistics Norway (SSB), unemployment will likely rise from 3.7% in 2023 to just over 4% in 2025.
A poll carried out by the Confederation of Norwegian Enterprise (NHO) among member companies in December already shows that 28% of businesses expect to cut staff during the next six months.
Housing prices expected to fall
The property market in Norway is likely to cool off next year, and experts believe prices will decline for most of 2023.
Statistics Norway (SSB) forecasts that housing prices will fall around 8% from the third quarter of 2022 to the same period next year.
The SSB’s sentiment is shared by other industry and financial analysts – experts at Handelsbanken believe that house prices will fall by about 7% between August this year and the same month in 2023.
Income tax and tax on tourists
The Norwegian government plans to reduce income tax for people with a income below NOK 50,000.
According to a 2023 budget proposal example, a family with two incomes of NOK 550,000 in Norway is likely to pay about NOK 7,800 less in taxes in 2023, compared with 2021.
The Ministry of Finance has previously stated that the tax changes will mean that 76% of Norwegian workers will pay less or the same amount in tax as they currently pay.
Furthermore, the current government is considering introducing a tax on tourists and tourism-related activities.
While a concrete policy proposal has yet to be formulated, it is likely to take the form of tourists paying additional tax on tourism activities and hotels.
New measures to support the vulnerable
The Labor Party (AP) and Center Party (SP) government has put a lot of focus on supporting vulnerable parts of society – especially in light of skyrocketing prices.
The 2023 budget includes an annual income increase for single parents with low income, as well as an increased child allowance (the measure is expected to be restructured in March 2023).
Furthermore, a special package of measures is being deployed to support young unemployed people under the name of the “young persons’ guarantee.”
The measures will target unemployed people under 30 years of age, with the end goal of helping this group enter the job market as swiftly as possible.
Students are expected to get increased grants in the 2023-2024 school year, while cancellations of student loans from the Norwegian State Educational Loan Fund for people living and working in the Finnmark and Nord-Troms area are likely to be stepped up.
At the same time, the government plans to introduce tuition fees for international students from outside of the European Economic Area (EEA) from next year.
The exact fee structure has yet to be officially revealed, but estimates published by Norwegian Broadcasting (NRK) state that a study place could cost international students about NOK 130,000 a year.
Changes in preschool costs
The maximum price for daycare in Norway will be reduced to NOK 3,000 per month in 2023.
Furthermore, day care will be free for all children in Finnmark and Nord-Troms. In the rest of the country, it will be free for the third child in families that have three children in daycare at the same time.
The government plans to reduce ferry rates by 50% everyone, while people living on Norwegian islands who don’t have road connections will get to travel by ferry for free.
At the same time, the fuel tax will be lowered, likely leading to cheaper diesel and gasoline prices in Norway from January on.
The government wants to introduce VAT on expensive electric cars from Jan. 1, as well as increase tolls for electric cars.
Managing ongoing crises and welfare
Norwegian households have been shielded from the electricity crisis in 2022 by state subsidies, and these protective measures will stay in place in 2023.
The government has set aside billions to ensure that people in Norway don’t see their personal finances crushed by ever-increasing energy costs.
At the same time, the government wants to cut state expenditures by reducing the earnings period for unemployment benefits from three years to one year.
The government plans to implement continued specific upward adjustment of indicative rates for social assistance, an extended period of work assessment allowance for recipients who need more time for assessment, and a holiday supplement for unemployment benefits.
In addition, the housing allowance and financial assistance for food banks are set to be increased.
Recruiting more general practitioners and social inclusion
The Norwegian government plans to address one of the key issues in the country’s health-care system—a lack of general practicalness—by implementing multiple measures to keep and recruit more of them.
An increase in funding for grants for social inclusion measures for children and young people is also planned for 2023.
This article originally appeared in the January 2023 issue of The Norwegian American. To subscribe, visit SUBSCRIBE or call us at (206) 784-4617.