Norway flag Norway: Economic outline

Economic Outline

Economic Indicators

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: after losing only 0.8% in the aftermath of the pandemic, the country’s GDP was estimated at +3% in 2021, thanks to a strong rebound in private consumption and an increase in employment, which offset declining investments. Benefitting from higher oil and gas prices (Norway’s main exports), from 2022 economic output is projected to be running slightly above the pre-pandemic path. The economy is forecast to grow by 4.1% this year, before slowing to 2.9% in 2023 (IMF), although uncertainty remains due to the new waves of the pandemic and to the historically high household debt level.

The general government balance was estimated at -12.6% in 2021 by the IMF, as Norway’s public finances rely heavily on oil and gas output. The projections envisage a substantial decrease in the oil-adjusted fiscal deficit in 2022, with a forecast of -10.7% (followed by -10% in 2023). 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. The debt-to-GDP ratio stood at 42.7% in 2021 and is expected to follow a downward trend over the forecast horizon (42.4% and 41.8% in 2022 and 2023, respectively). The value of Norway's Sovereign Wealth Fund remains the world’s largest, being valued at over USD 1.4 trillion at the end of 2021. The Norwegian fund invests in more than 9,100 companies worldwide. Inflation was on an upward trend in 2021 (+2.6% from 1.3% one year earlier), triggering Norges Bank’s Executive Board decision to raise the key policy rate from the historic low of 0.0% to 0.25%. The IMF expects inflation to stabilize around 2% over the forecast period.

Norway is a rich country, with one of the highest GDP per capita in the world (estimated at USD 69,171 PPP in 2021 by the IMF). The nation also scores at the top of the United Nations Development Programme’s Human Development Index ranking. Unemployment grew only slightly in 2021 (at 4.3%), already exceeding pre-pandemic levels. In line with the economic recovery, employment is set to continue increasing, while the rate of unemployment should fall further to 4% this year and 3.9% in 2023 (IMF).

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 405.51e362.52e445.51458.40473.82
GDP (Constant Prices, Annual % Change) 0.9e-0.8e3.04.12.9
GDP per Capita (USD) 75,700e67,326e82,24484,11986,430
General Government Balance (in % of GDP) -8.1-12.8e-12.6-10.7-10.0
General Government Gross Debt (in % of GDP) 40.941.4e42.742.441.8
Inflation Rate (%) 2.21.3e3.53.51.8
Unemployment Rate (% of the Labour Force) 3.7e4.6e4.34.03.9
Current Account (billions USD) 11.55e7.14e31.9731.8928.34
Current Account (in % of GDP) 2.8e2.0e7.27.06.0

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Norwegian Krone (NOK) - Average Annual Exchange Rate For 1 GBP 11.3410.6510.8511.0012.07

Source: World Bank, 2015

 

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Latest Update: September 2022

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