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Economic Overview

Norway's COVID-19-led economic downturn remained limited compared to most European countries, and the country recorded a growth of 3.3% of GDP in 2022 on the back of strong exports. Nevertheless, throughout 2023, economic growth has decelerated to an estimated 2.3%, influenced by persistently high inflation and escalating interest rates, which have exerted pressure on domestic demand. The increased cost of living has resulted in a weakened private consumption sector and housing investment has experienced a substantial decline, attributable to elevated construction costs and diminished growth in house prices. The pace of business investment growth has also slowed down. The IMF projects a further deceleration in 2024 (1.5%) and 2025 (1.2%).

Norway’s public finances are sound. The 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 2023, the debt-to-GDP ratio was estimated at 37.4%, down from 37.1% one year earlier (IMF). The ratio is expected to follow a downward trend over the forecast horizon, at around 36.2% (IMF). According to the latest estimates by the OECD, Norway's overall budget surplus, including petroleum revenues, stood at 26% of GDP in 2023. The government estimates the structural non-oil budget deficit at 9.9% of mainland trend GDP in 2023 with an increase to 10.3% in 2024. The 2024 draft budget proposes a 0.4% increase in petroleum revenue spending, which involves transfers from the oil fund to the budget, relative to the mainland trend GDP. Headline inflation was on a downward trajectory in 2023 (at 5.8% as per the IMF), primarily driven by reduced electricity prices, and is expected to continue easing. However, underlying inflation is expected to decrease at a slower pace, as it is influenced by wage pressures and the delayed impact of the Norwegian currency's weakening. For this year and the next, inflation is projected at 3.7% and 2.6%, respectively.

Norway is a rich country, with one of the highest GDP per capita in the world (USD 82,236 PPP in 2023 by the IMF). The nation also scores at the top of the United Nations Human Development Index ranking. Unemployment stood at 3.6% in 2023 and the labour market remained tight. The unemployment rate is expected to rise as economic activity softens, but to remain around its pre-pandemic level (at 3.8% over the forecast horizon – IMF), while a still-tight labour market should keep wage growth strong.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 579.42546.77567.74571.22575.77
GDP (Constant Prices, Annual % Change) 3.32.31.51.21.5
GDP per Capita (USD) 105,82699,266102,459102,473102,672
General Government Balance (in % of GDP) -7.0-7.4-8.0-8.1-8.1
General Government Gross Debt (in % of GDP) 37.137.436.336.235.9
Inflation Rate (%) n/a5.83.72.62.0
Unemployment Rate (% of the Labour Force) 3.33.63.83.83.8
Current Account (billions USD) 174.74143.30144.09130.58115.23
Current Account (in % of GDP) 30.226.225.422.920.0

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 1.5% of Norway’s 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. The country’s seafood exports totalled a record NOK 151.4 billion (2.9 million tonnes), up by 25% from one year earlier, with salmon exports exceeding NOK 100 billion.

Industry employs 19% of the workforce and represents 48.7% 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 economy, 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 903 billion in 2022, NOK 382 billion lower compared to the net cash flow in 2022, which was fuelled by high prices of oil and gas 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 (78%) and accounts for 42.2% of GDP. According to Statistics Norway, there were 36.1 million guest nights in 2022, one-third higher than the previous year. As per the Norwegian banking sector, it 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) 2.3 19.2 78.5
Value Added (in % of GDP) 1.6 48.7 42.1
Value Added (Annual % Change) 2.0 0.3 5.5

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. Fish was the main export in 2022 (21.39% of the total), followed by manufactured goods (20.9%) and fuels (20.7% - data Statistics Norway). In the same year, imports were led by motor cars (8.1%), petroleum (6.6%), and nickel (3%).

The country's main trade partners are generally member states of the European Union (67.5% and 55.5% of total exports and imports in 2022, respectively). In terms of countries, Germany (27.6%) was the main destination, followed by the UK (22.3%), France (9.3%), Belgium (7.5%), and the Netherlands (6.3%). Sweden was the main supplier of goods and services in Norway (12.6%), ahead of China (12.3%), Germany (11.4%), the United States (6.2%) and Denmark (4.6% - data Statistics Norway).

In 2022, Norwegian foreign trade experienced an outstanding year: the dynamics of energy prices significantly influenced the country's exports, while concurrently, elevated inflation played a role in increasing both imports and exports in nominal terms. Export prices saw a more pronounced growth compared to import prices. Overall, the trade balance in goods and services recorded a notable increase, reaching NOK 1,579 billion compared to the previous year's figure of NOK 544 billion (Statistics Norway). According to data from WTO, total exports reached USD 249.8 billion (+56% y-o-y), with imports increasing at a slower pace (USD 105.5 billion, +7.9%). Meanwhile, services exports stood at USD 50.6 billion, against USD 53.4 billion in imports (+22.6% and +27%, respectively – WTO). According to preliminary data from Statistics Norway, in the first eleven months of 2023 goods exports totalled NOK 1,717 million (-28.9% y-o-y), whereas imports stood at NOK 944 million (+0.7% y-o-y).

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 85,31980,44797,764105,54595,292
Exports of Goods (million USD) 102,79984,459160,106249,805173,906
Imports of Services (million USD) 52,62539,52742,05357,23061,371
Exports of Services (million USD) 42,90534,11341,27452,21152,012

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

Foreign Trade Indicators 20182019202020212022
Foreign Trade (in % of GDP) 70.070.965.470.583.0
Trade Balance (million USD) 33,81615,7892,06563,675166,982
Trade Balance (Including Service) (million USD) 25,0656,069-3,34862,897164,152
Imports of Goods and Services (Annual % Change) 1.45.3-9.91.79.3
Exports of Goods and Services (Annual % Change) -1.52.1-2.35.85.9
Imports of Goods and Services (in % of GDP) 31.834.333.128.827.3
Exports of Goods and Services (in % of GDP) 38.236.632.241.755.7

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20232024 (e)2025 (e)2026 (e)2027 (e)
Volume of exports of goods and services (Annual % change) 5.12.21.31.51.5
Volume of imports of goods and services (Annual % change) 0.81.51.92.22.2

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 27.7%
United Kingdom 22.3%
France 9.3%
Belgium 7.5%
Netherlands 6.3%
See More Countries 26.9%
Main Suppliers
(% of Imports)
2022
Sweden 12.6%
China 12.3%
Germany 11.4%
United States 6.3%
Denmark 4.6%
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. Norwegian Prime Minister Jonas Gahr Støre shuffled his Cabinet in October 2023 after his centre-left party was defeated in local elections in September by the centre-right opposition party. Three ministers have exited the Cabinet, and two have been reassigned to new positions. The Cabinet has undergone an expansion, now comprising 20 members, with the addition of a new role dedicated to digitalization.
Although it is not part of the European Union, Norway decided to incorporate the sanctions against Russia into Norwegian law and also to increase its defence budget.
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

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
The information on the economicand fiscal measures put in place by the Norwegian government to address the impact of the COVID-19 pandemic is available on the KPMG's website.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) undertaken by the Norwegian government, please consult the section dedicated to Norway in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, 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.

 

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