Economic trends
After more than 15 years of high 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 of 1.4% in 2009, growth returned in 2010-11 due to reflationary measures, household consumption, the dynamic real estate market, and favorable terms of trade. A dip in growth is expected in 2012 (1.5%) due to difficulties encountered by the Eurozone.
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. The program of the centrist government emphasizes employment, the environment, and the reform of the education and healthcare system.
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 (3.3% of the active population).
Main branches of industry
Agriculture contributes to nearly 2% of the GNP. Fishing is an important activity, with Norway as one of the biggest exporters of fish in the world. Agricultural subsidies are therefore very important.
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. Despite Norway boasting one of the largest sovereign wealth funds in the world, the political consensus is to save oil and gas revenues for future generations. 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 and accounts for more than three quarters of GNP.
International trade
Norway has a very open economy. Trade represented, on average, more than 70% of GDP during 2008-2010.
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 is structured to lean towards surplus revenues; this trend is expected to continue during the next few years.
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Last updates: May 2012
