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Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Norway's Covid-19-led economic downturn remained limited compared to most European countries, with GDP growing an estimated 3.6% in 2022 (from 3.9% one year earlier – IMF). Though still strong, private consumption (which accounts for 45% of GDP) decelerated in 2022 due to inflation pressures and declining consumer confidence. In the same year, Norway benefited from higher oil and gas prices (the country’s main exports) and increased exports to Europe following the EU sanctions against Russia (Norway’s exports almost doubled in the first eleven months of 2022). High inflation and policy tightening will weigh on domestic demand in 2023, as the worsening economic situation of the main trading partners will also contribute to a deceleration in the growth rate, forecasted at 2.6% this year and 2.2% in 2024 by the IMF (0.7% and 1.3%, respectively, according to OECD).

Norway’s public finances are sound. Norway's government gross debt did not expand substantially in the aftermath of the Covid-19 crisis unlike in the rest of Europe, despite public monetary support and a comprehensive loan programme to the banks. In 2022, the debt-to-GDP ratio was estimated at 40.3%, down from 43.4% one year earlier (IMF). The ratio is expected to follow a downward trend over the forecast horizon, at around 39%. The government budget deficit also decreased: it was estimated at 8.6% of GDP in 2022 compared to 10.1% one year earlier, thanks to direct transfers from the oil industry and withdrawals from the sovereign wealth fund. The household electricity support scheme will be extended into 2023 at a cost of around 1.2% of mainland GDP. Overall, the IMF forecasts a deficit of 8.1% this year and 8.2% in 2024. Moreover, the 2023 budget envisages a 9.4% reduction in the spending from the Government Pension Fund Global, to NOK 316,8 billion (official government figures). Such contractionary fiscal policy should help reduce inflation, which reached its highest levels in decades in 2022 (4.7%). In the same direction, the Norges Bank increased the policy rate further in November by 0.25 percentage points to 2.5%. Inflation is expected to decelerate gradually to 3.8% in 2023 and 2.7% the following year.

Norway is a rich country, with one of the highest GDP per capita in the world (estimated at USD 78,128 PPP in 2022 by the IMF). The nation also scores at the top of the United Nations’ Human Development Index ranking. Unemployment stood at 3.9% in 2022 and the labour market remained tight. The government expects employers to continue to experience problems in recruiting within several professions in the short term, with unemployment projected at 3.8% in 2023 (IMF).

 
Main Indicators 202020212022 (E)2023 (E)2024 (E)
GDP (billions USD) 367.63490.29579.27554.11564.40
GDP (Constant Prices, Annual % Change) -1.33.93.32.12.5
GDP per Capita (USD) 68,39990,764106,328101,103102,367
General Government Balance (in % of GDP) -11.7-9.5-6.7-6.8-6.7
General Government Gross Debt (in % of GDP) 46.142.739.638.838.5
Inflation Rate (%) 1.33.55.84.92.8
Unemployment Rate (% of the Labour Force) 4.64.43.33.53.7
Current Account (billions USD) 4.0566.81175.85140.68130.79
Current Account (in % of GDP) 1.113.630.425.423.2

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Agriculture accounts for 1.6% of GDP and employs 2% of the workforce (World bank, latest data available). Fishing is an important activity as Norway is the world's second-biggest seafood exporter after China. Agricultural subsidies are very significant. The country counts 38,076 agricultural holdings (of which 1,954 are certified organic farming holdings - Statistics Norway) and is more than self-sufficient in animal products, livestock being one of the major agricultural subsectors. However, Norway remains dependent on imports for cereal crops (soybeans, wheat, rapeseed and bananas). About 33.4% of Norway’s total land area is covered by forests, 12.6 million ha in total.

Industry employs 19% of the workforce and represents 35.5% of GDP. Norway’s economy depends on its natural resources and energy sources (oil, gas, hydraulic energy, forests and minerals). Oil rents, which have once dominated the GDP, now provide less than 4% of GDP, well below its peak level in 2000. Nevertheless, the oil and gas sector is Norway's largest measured in terms of value-added, government revenues, investments and export value. The government’s total net cash flow from the petroleum industry was estimated to be NOK 1,316 billion in 2022, marking a consistent increase due to higher estimates for oil and in particular gas prices amid the Russia-Ukraine conflict. Manufacturing accounts for 5% of GDP. Shipbuilding, metals, wood pulp and paper, the chemical industry, machinery and electrical equipment make up Norway’s main manufacturing industries. Norway also has one of the largest and most modern fleets in the world.

The Norwegian service sector is highly developed; it employs over three-quarters of the population (79%) and accounts for 52.5% of GDP. According to Statistics Norway, tourism consumption stood at NOK 129,750 million in 2020 (latest data available), accounting for 6.8% of total employment. The Norwegian banking sector is comprised of 136 banks of which 118 are local banks and 18 are branches of foreign banks. The market share of the subsidiaries and branches of foreign banks were 24% and 37% in the retail and domestic corporate markets, respectively (European Banking Federation, latest data available).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 2.0 19.4 78.5
Value Added (in % of GDP) 1.6 35.5 52.5
Value Added (Annual % Change) 6.7 2.2 4.5

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Norwegian Krone (NOK) - Average Annual Exchange Rate For 1 USD 8.408.278.138.809.42

Source: World Bank - Latest available data.

 

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Foreign Trade

Norway has a very open economy, with trade representing 71% of GDP (World Bank, latest data available). Traditionally, the country exports energy-intensive products and imports high-technology items. Norway is among the top 20 exporters of oil and the second-largest natural gas and seafood exporter in the world. Petroleum oils and gases represent more than 60% of total exports. Seafood is also among the most exported products (4.9%). Imports are led by motor cars (8.5%), petroleum, and nickel (data Comtrade).

The country's main trade partners are generally member states of the European Union. In 2021, however, the United Kingdom was the top destination of Norwegian exports (20.5%), followed by Germany (19.1%), the Netherlands (9.9%), Sweden (7.8%) and France (7.2%). China was the main supplier of goods and services in Norway (13.2%), followed by Sweden (11.3%), Germany (11.1%), the United States (6.3%) and the UK (4.6% - data Comtrade).

Norway’s trade surplus is considerable. However, it is closely linked to global oil and gas prices. In 2021, total exports almost doubled, reaching USD 160.1 billion, with imports increasing at a slower pace (USD 97.7 billion, +21.5%). Services exports stood at USD 40.3 billion, against USD 41.3 billion of imports (+13.8% and +12.2%, respectively – WTO). After it had turned negative for the first time in the last thirty years (due to low energy prices), the overall trade balance was positive by 12.3% of GDP in 2021 (World Bank). According to preliminary data from Statistics Norway, in the first eleven months of 2022 goods exports totalled NOK 2.3 million (+96.4% y-o-y – thanks to higher energy prices and lower supplies to Europe from Russia), whereas imports stood at NOK 934 million (+20.9% y-o-y). Furthermore, The Norwegian Seafood Council reported that Norway exported 2.9 million tonnes of seafood, equivalent to a value of around EUR 14 billion in 2022, an all-time high.

 
Foreign Trade Values 20172018201920202021
Imports of Goods (million USD) 81,24986,60085,31980,44797,764
Exports of Goods (million USD) 101,054121,791102,79984,459160,106
Imports of Services (million USD) 49,94452,07652,41736,86441,362
Exports of Services (million USD) 40,84543,29643,28835,41440,301

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20172018201920202021
Foreign Trade (in % of GDP) 69.270.271.065.370.9
Trade Balance (million USD) 23,20333,81615,789-13159,690
Trade Balance (Including Service) (million USD) 13,91025,0656,069-2,91458,629
Imports of Goods and Services (Annual % Change) 1.91.45.1-11.92.3
Exports of Goods and Services (Annual % Change) 1.7-1.21.1-1.24.7
Imports of Goods and Services (in % of GDP) 32.832.234.833.129.3
Exports of Goods and Services (in % of GDP) 36.338.036.332.241.6

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20222023 (e)2024 (e)2025 (e)2026 (e)
Volume of exports of goods and services (Annual % change) 5.94.02.71.51.4
Volume of imports of goods and services (Annual % change) 9.30.91.41.92.2

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Norway is a member of the following international economic organisations:  IMF, European Union, ICC, Euro-Atlantic Partnership Council (EAPC), WTO, OECD, among others. For the full list of economic and other international organisations in which participates Norway click here. International organisation membership of Norway is also outlined here.
Free Trade Agreements
The up-to-date list of Free Trade Agreements signed by Norway can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)
2022
Germany 27.9%
United Kingdom 21.4%
France 9.4%
Belgium 7.6%
Netherlands 6.4%
See More Countries 27.3%
Main Suppliers
(% of Imports)
2022
Sweden 12.6%
China 12.3%
Germany 11.4%
United States 6.1%
Denmark 4.7%
See More Countries 52.8%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
King: Harald V (since 17 January 1991) - hereditary
Prime Minister: Jonas Gahr STORE (since 14 October 2021) – Labour Party
Next Election Dates
Parliamentary: 30 September 2025
Current Political Context
The Labour Party led by Jonas Gahr Støre managed to form a minority coalition government with the Centre Party following the 2021 parliamentary election. The third potential government partner – the Socialist Left Party – decided not to join the coalition over disagreements related to environmental policy (as oil and gas exploration should continue at both old and new oil fields); however, it supports Støre’s government on a case-by-case basis. Government stability is further guaranteed by the Norwegian constitution, which does not allow the dissolution of the parliament and early elections.
In 2022, Norway held the presidency of the Nordic Council of Ministers, focusing on the three priority areas of a green, competitive, and socially sustainable Nordic Region.
Although it is not part of the European Union, Norway decided to incorporate the sanctions against Russia into Norwegian law, and also decided to increase its defence budget by almost 10% (to around USD 7.2 billion).
Main Political Parties
Coalition governments comprising several parties are typical in Norway. Currently, nine parties are represented in the parliament. The Labour Party and the Conservative Party are the most represented.

- Norwegian Labour Party (DNA): centre-left
- Conservative Party (Høyre): centre-right
- Centre Party (SP): centrist
- Progress Party (FrP): right-wing party
- Socialist Left Party (SV): left-wing
- Red Party (Rødt): left to far-left, Marxist
- Liberal Party (Venstre): centre-right, conservative-liberal
- Green Party: centre-left green political party
- Christian Democratic Party (KrF): centre
Executive Power
The constitution grants executive powers to the King (the head of state), but these are exercised by the cabinet. The King serves a ceremonial role with some reserve powers. After elections, the majority leader is usually appointed Prime Minister (the head of the cabinet) by the monarch with the approval of the parliament.
Legislative Power
The Storting is the legislative body of Norway. The parliament is unicameral and consists of 169 representatives. Members are elected for four-year terms according to a system of proportional representation. The Storting cannot be dissolved before serving its full four-year term.
 

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COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Norway, please consult the official data on the Norwegian Institute of Public Health website. The NIPH also provides a daily epidemiological update.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To find out about the latest public health situation in Norway and the current sanitary measures in vigour, please consult the website of the Norwegian Institute of Public Health. The national long-term strategy and the plan for handling the COVID-19 pandemic can be consulted on the portal of the Norwegian government.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For the up-to-date information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the website of the Norwegian customs authority Toll.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Norway on the
International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

For the information on the economic recovery scheme put in place by the Norwegian government to address the impact of the COVID-19 pandemic on the national economy, please visit the dedicated page on the web portal of the Norwegian government. Further details are available on KPMG's website.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Norwegian government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Norway in the
IMF’s Policy Tracker platform.

Support plan for businesses

For the information on the local business support scheme established by the Norwegian government to help small and medium-sized companies to deal with the economic impacts of the COVID-19 epidemic on their activity, please consult the portal of the Ministry of Trade, Industry and Fisheries.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

For the up-to-date information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the website of the Norwegian customs authority Toll.

 

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