Bank: household finances better than a decade ago

Despite the recent price hikes, household finances appear to be stronger now than 10-11 years ago.

“In 2012, 48 percent of households said they only just managed to make ends meet. In January 2023, this figure had come all the way down to 26 percent,” says BankNordik’s finance director Arnhold Olsen.

“In general, personal finances have improved greatly in recent years. We are all feeling the effect of rising prices, but this has not significantly affected personal finances as such.”

 >> SEE ALSO Consumer spending unaffected by high interest rates

He is keen to point out that this is a general observation.

“Those who had financial struggles before the recent price hikes tend to struggle even more now,” he says.

The bank has since the start of the Covid pandemic been keeping a close eye on negative accounts, overdrafts and requests for concessional terms in loan repayments.

“We are seeing no increase in negative accounts or overdrafts. There has been a slight increase in requests for loan deferments. This is only a marginal increase, and it is not yet clear whether all these requests are due to financial hardships. There may be other reasons such as taking up study.”

 >> SEE ALSO More inflation relief coming up

In related news, the latest household composition figures from Statistics Faroe Islands reveal that half of Faroese households consist of one or two people.

The number of households has increased in line with the big population growth in the past decade.

In April 2013, there were 16,700 households in the country. By April 2023, this figure had reached 19,041.

The two biggest household categories consist of one adult/no children (4,877) and two adults/no children (4,647). These add up to 9,524, which is half of the 19,041 total. All other households have children.

Read the Faroese versions of this article here and here.

More Faroese News in English.