After more than 15 years of strong growth (annual average of more than 5%), Norway was affected by the global economic recession; however, the drop in production was less severe when compared with other countries. After a slight economic decline in 2009 (-1.6%), growth returned, supported by stimulus measures, household consumption, the dynamic real estate market, and favorable terms of trade.
In 2013, growth slowed down (2%) because of the high business costs and a high level of household debt acting as impediments to growht. For 2014, growth is predicted to reach 2.5%, its main drivers being the budget policy, low interest rates and a strong demand in the oil sector.
Despite being highly dependent on oil prices, the Norwegian economy is very stable with positive prospects. The main challenge for the government is to maintain a stable growth in an adverse international environment while reducing any weaknesses resulting from the tax burden, high levels of household debt, and raised real estate prices.
In 2013, inflation remained stable at around 2.%, the real estate market was more calm and household consumption slowed down. The program of the government emphasizes employment, the environment, and the reform of the education and healthcare system. The 2014 budget, which is still marked by fiscal prudents, was revised at the end of 2013 when the new conservative government came to power. It plans to increase the use of oil revenues to finance various tax relief measures. The government has prioritized infrastructure spending, measures to stimulate competitiveness, growth and production. The country must deal with the question of how to pay for pensions in the future.
Norway is a rich country, with the second highest rate of PNB per capita in the world (55,6000 USD in terms of purchasing power parity). The country also holds first place in the United Nations Development Program’s human development index. Contrary to initial fears, unemployment was maintained during the crisis and has stabilized at a low rate (3.5% of the active population). However, the country has a large number of individuals outside the labour market (around 8%) due to disability or on long-term medical leave.
|Main Indicators||2011||2012||2013||2014||2015 (e)|
|GDP (billions USD)||490.81||500.03||512.58||511.60e||523.19|
|GDP (Constant Prices, Annual % Change)||1.3||2.9||0.6||1.8e||1.9|
|GDP per Capita (USD)||98,694||99,249||100||99,295||100,439|
|General Government Balance (in % of GDP)||-4.8||-5.2||-5.4e||-6.1||-6.5|
|General Government Gross Debt (in % of GDP)||29.0||29.5||29.5e||29.5e||29.5|
|Inflation Rate (%)||1.3||0.7||2.1||2.0||2.0|
|Unemployment Rate (% of the Labor Force)||3.3||3.2||3.5||3.7||3.8|
|Current Account (billions USD)||66.45||72.61||57.39e||54.43||53.55|
|Current Account (in % of GDP)||13.5||14.5||11.2e||10.6||10.2|
Source: IMF - World Economic Outlook Database , Last Available Data
Note: (e) Estimated Data
Agriculture contributes to nearly 1.5% of the GDP. Fishing is an important activity, with Norway as one of the biggest exporters of fish in the world. Agricultural subsidies are very significant.
Norway’s economy relies on its natural resources and energy sources (oil, gas, hydraulic energy, forests, and minerals). Oil production dominates the economy, making up nearly one quarter of the GNP. Norway is also a major producer and exporter of natural gas. The political consensus is to save oil and gas revenues for future generations, so that Norway has one of the largest sovereign wealth funds in the world. Shipbuilding, metals, wood pulp and paper, 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 service sector is highly developed, it employs three quarters of the population and accounts nearly 60% of GDP.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||2.2||20.2||77.4|
|Value Added (in % of GDP)||1.5||40.8||57.7|
|Value Added (Annual % Change)||-1.4||-1.2||1.5|
Source: World Bank - Last Available Data.
|Norwegian Krone (NOK) - Average Annual Exchange Rate For 1 USD||6.29||6.04||5.60||5.82||5.88|
Source: World Bank - Last Available Data.
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Norway has a very open economy. Trade represented, on average, more than 70% of GDP during 2009-2011.
Traditionally, the country exports energy-intensive products and imports high-technology items. Its main trade partners are European Union nations. The country is the third largest exporter of oil, the biggest natural gas supplier for Western Europe, and the premier fish supplier in the world. Overall, Norway ranks among the 30 biggest global exporters. Industrial products (ships, oil platforms, etc.) constitute close to 10% of total exports. Norway mainly imports manufactured items (machinery, transporters, information technology), which accounts for 40% of all imports.
Norway’s trade surplus is considerable. The country’s trade balance structurally positive; this trend is expected to continue during the next few years. In January 2014, the trade surplus reached its monthly record level of 5.8b EUR, which was almost 42% more compared to the same period last year, thanks to large oil and gas exports combined with strong exports of goods.
|Foreign Trade Indicators||2009||2010||2011||2012||2013|
|Imports of Goods (million USD)||69,292||77,326||90,852||87,321||90,063|
|Exports of Goods (million USD)||120,880||130,669||159,253||161,026||153,254|
|Imports of Services (million USD)||36,291||50,339||47,847||41,165||42,794|
|Exports of Services (million USD)||38,261||44,467||43,444||38,318||37,597|
|Imports of Goods and Services (Annual % Change)||-12.5||9.0||3.8||2.3||2.9|
|Exports of Goods and Services (Annual % Change)||-4.2||0.4||-0.7||1.1||-3.3|
|Imports of Goods and Services (in % of GDP)||27.7||28.5||28.3||27.6||28.2|
|Exports of Goods and Services (in % of GDP)||40.0||40.5||41.9||40.9||38.9|
|Trade Balance (million USD)||48,686||54,081||73,763||76,944||65,505|
|Trade Balance (Including Service) (million USD)||47,010||50,461||66,947||67,495||55,686|
|Foreign Trade (in % of GDP)||67.8||69.0||70.2||68.5||67.0|
Source: WTO - World Trade Organization ; World Bank , Last Available Data
(% of Exports)
|See More Countries||35.6%|
(% of Imports)
|See More Countries||53.7%|
Source: Comtrade, Last Available Data
|- bn USD of products exported in 2014|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude||30.9%|
|Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons||27.5%|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||5.3%|
|Fish, fresh or chilled (excl. fish fillets and...Fish, fresh or chilled (excl. fish fillets and other fish meat of heading 0304)||4.2%|
|Unwrought aluminiumUnwrought aluminium||2.2%|
|See More Products||29.8%|
|- bn USD of products imported in 2014|
|Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702)||6.2%|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||3.2%|
|Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s.||2.3%|
|Nickel mattes, nickel oxide sinters and other...Nickel mattes, nickel oxide sinters and other intermediate products of nickel metallurgy :||2.1%|
|Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006)||1.7%|
|See More Products||84.5%|
Source: Comtrade, Last Available Data
Labour Party, Socialist Left and the Centre Party form the current cabinet. Coalition governments of several parties are typical in Norway.
The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Last Updates: October 2014