Norwegians’ Confidence in Country's Economy Plummets to Historic Low Amid Russia's Ukraine Op

As of now, Norwegians' confidence in their economy is even lower than it was at the height of the COVID-19 pandemic when massive lockdowns shut down the entire country.

Norwegians’ confidence in their personal finances and the country’s economy has fallen steeply in March, reaching a historic low, according to the nation's Consumer Confidence Index (CCI).

According to Henrik Høidahl, head of politics and society at the pollster Opinion, Russia's special operation to "demilitarise and de-Nazify" Ukraine, which in Norway is near-universally portrayed as “invasion”, sent “shockwaves” in all directions.

“The monthly survey of confidence and expectations of people’s own finances and the country’s economy shows a historically large fall in March”, he told the newspaper Dagbladet.

Among others, Høidahl cited high electricity and fuel prices and announced interest rate hikes as the chief reasons for the decline.

The CCI is based on the average of consumers' assessments of household finances in twelve months, expectations of the country’s economy now and in twelve months, and households’ purchases of major consumer goods in twelve months.

A total of 55 percent of Norwegians think Norway’s economic situation will be worse in a year, compared to 31 percent in February, whereas 45 percent think their household’s financial situation will be a little or much worse, compared to 29 percent in February.

The previous low was registered in April 2020, the month after Norway closed down as a result of the COVID-19 pandemic.

Norway ranks among the world's most stable economies, with a vibrant private sector, a large state sector, and an extensive social safety net. As of now, its premier exports are oil and gas, as well as seafood.

Russia launched its military operation in Ukraine on 24 February, responding to calls for help from the People's Republics of Donetsk and Lugansk. The US and its Western allies retaliated by imposing massive sanctions against Russia and freezing some of its assets abroad, while many Western companies have left the country's market in protest.

On 23 March, Russian President Vladimir Putin announced that Russia would demand payments for gas supplies in rubles from “unfriendly countries”. He explained that after the West froze Russia's dollar and euro assets, “supplying our goods to the European Union and the US and receiving payment in dollars, euros, and a number of other currencies” would no longer make any sense to Moscow.

Meanwhile, surging energy prices have sparked a series of gloomy forecasts across Europe. Among others, the Bank of England's Governor Andrew Bailey has warned that the UK economy is facing its biggest shock in 50 years.