(Netafsen): Winter vacation is coming. It then goes hand in hand with Easter, before many holidays in May. And before you know it, summer vacation is knocking on the door.
The specter of interest looms over us, and the krona is weak.
-What are your best vacation tips to save a few thousand dollars?
– The krone has weakened significantly against other currencies, so check how much the euro, dollar or local currency you want to travel costs today, Nordea private economist Derya Incidursson tells Netavisen.
At the time of writing, one euro costs NOK 11.34, while one dollar costs NOK 10.54 – before adding additional currency charges from your bank.
Don't be fooled by countries that have historically been “cheap”:
– Check the price level and price trend in the country in which you excelled. In Norway we have seen high price growth, but in other countries the rate may have been even higher, says Insidorson.
In Türkiye, for example, there has been an increase in prices 170 percentwhich we will return to shortly.
-Avoid these traps
Incidorsson has no doubts: given price growth and exchange rates, it is the Eastern European countries that offer great value for money.
– Its most expensive price now is usually in countries that use the euro as currency. It may cost you more in both Spain and Germany than you are used to. This also applies to the United States, because the dollar is strong. Not to mention Turkey, which over the past two years has witnessed a 170 percent increase in prices.
-What traps should you absolutely avoid?
– When paying abroad using a payment card, choose the local currency. And if you are going to withdraw money from an ATM, say no, thanks to the exchange rate the ATM offers. Let the bank at home do the math, says the consumer economist.
Price examples
To emphasize how important it is to learn about local conditions, Derya Incidursson takes us through these examples:
in United States of America Prices have risen by ten percent in the past two years, and the dollar has become 16 percent more expensive. Imagine that you bought a good in the United States for $100 in 2022. Two years later, due to rising prices, the price of that good rose to $110. Meanwhile, the dollar has become stronger against the Norwegian krone, so the same item will now cost you NOK 1,122, compared to NOK 880. This represents an increase of 27 percent before we include inflation in Norway.
– But when we also take into account that prices in Norway rose by approximately 11 percent, the American product is approxt 15 percent more expensive For us now than it was two years ago.
in Spain Prices have risen by 9 percent in the past two years, and the euro has become 13 percent more expensive. Let's say you bought an item in Spain for €100 in 2022. With prices increasing over the past two years, the same item would now cost €109. The euro has also become more expensive in Norwegian krone, so the item will now cost you NOK 1,231, up from NOK 1,000. This corresponds to an increase of 23 percent before we adjust for inflation in Norway.
– But after taking into account the 11 percent increase in Norwegian prices, we see that the goods from Spain are approx 12 percent more expensive For us now than it was two years ago.
in turkey Prices have risen by 170 percent in the past two years, and the Turkish lira has become 47 percent cheaper. Let's say you bought an item in Turkey for 100 TL in 2022. With prices increasing over the past two years, the same item will now cost 270 TL. Meanwhile, the Turkish lira has become less valuable compared to the Norwegian krone, so the same item will now cost you 93 Norwegian krone, up from 66 Norwegian krone. This is an increase of 40 percent.
– Prices in Norway rose by 11 percent, so prices in Turkey rose for us Norwegians as well 29 percent.
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