Follow the light: Consumer debt is rising, as the low interest-rate era draws to a close. Photo: imagedepotpro/gettyimages
We’re having quite the day here at Nordea and at Nordea On Your Mind, we’re proud to be making our own little but not insignificant contribution partnering big brother, The Economic Outlook. We’re turning the laser on Nordic consumer debt which over the last couple of decades, has spiralled towards the top of the OECD league tables.
There are reasons for that. The low-interest era has encouraged spending but there has also been a shift in consumer habits as, for example, renting takes preference over owning, thus avoiding a large up-front expenditure.
But the low-interest rate era is no more. Our Economic Outlook colleagues will cover this in detail, but Nordic consumers can expect rates to rise 100-300 basis points by 2020. The effects won’t be uniform, but they will be significant. The attendant credit risks are real and that could have reverberations for growth as consumers reign in spending.
We interview Fredrik Sauter, Country Manager Nordic at global credit card group AmericanExpress, and Nordea Equity Research Banks analyst Ermin Keric on The Nordic consumer finance industry, its drivers and its prospects.
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