Norway WT/TPR/S/269 
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  I. ECONOMIC ENVIRONMENT 
(1) MAJOR FEATURES OF THE ECONOMY  
1. Norway's population passed the 5 million mark in  March 2012.  The stead y population growth 
in recent years stems from increasing longevity, a rela tively high birth rate, and immigration.  With 
a GDP per capita of approximately NKr 547,0 00 (US$97,600) in 2011, Norway remains among the 
world's wealthiest nations.  A key factor of Norway 's wealth has been the abundance and variety of its 
natural resources, carefully managed and sh ared among a relatively small population.   
2. Norway has traditionally been an exporter of raw materials such as timber and fish.  It began 
tapping its hydropower resources in the early days  of industrialization, and developed outward 
oriented metal, chemical, and pape r/paperboard industries.  The discovery of significant oil resources 
in the North Sea from the late 1960s onwards, and su bsequently in other locations on the Norwegian 
continental shelf, marked a new era for the No rwegian economy.  By the early 1990s, Norway had 
become the world largest exporter of crude o il outside OPEC.  Although Norway's production of 
crude oil peaked in 2001, the dec line has not been precipitous and the production of natural gas has 
been increasing.  Thus, Norway may be a major ex porter of natural gas and crude oil for decades to 
come.1  Moreover, focus on increased recovery of oil, exploitation of smaller fields, and the search for 
additional resources have led to the development of  a significant, and essentially globally-oriented, 
maritime supply and petroleum services industry.   
3. As fossil fuels are an exhaustible resource, long-term planning is attentive to economic 
activity beyond the petroleum age.  Norway's mine ral resources are thought to be considerable, and 
systematic mapping has begun to determine their potential.2  Norway's merchant fleet is the world's 
seventh largest in tonnage.  Fish farming, whic h began in the 1970s, has given a major boost to 
Norway's production and export of fish and seafoo d products.  Norway is the largest producer of 
hydropower in Europe, and the domestic power gr id is almost entirely hydro-power based.  
Depending on the evolution of energy prices and technological advances, Norway may also have considerable potential in other re newable forms of energy, such as wind and wave power.  However, 
the authorities recognize that high standards of liv ing in the future will have to be based on 
competitive, knowledge-intensive industries a nd innovative methods of production.   
(2) R
ECENT ECONOMIC DEVELOPMENTS  
4. The Norwegian authorities set up a State Petroleum Fund in 1990 to reduce the economy's 
dependency on oil revenues in the short-term an d build a buffer for future generations.  The 
Norwegian State derives its petroleum revenue fro m taxation of the sector, direct ownership in 
specific licences, and a 67% stake in the national en ergy company Statoil.  The surplus on central 
government accounts is saved in the Fund.  The cen tral government accounts have been in surplus in 
every year since 1995 (Chart I.1).  By the end of March 2012, the assets accumulated in the Fund had grown to NKr 3,496 billion, equal to 129% of Norw ay's GDP in 2011 (Box I.1).  Nevertheless, while 
                                                      
1 Norway is currently the world's second largest exporter of natural gas and ranks seventh among the 
world's exporters of crude oil.   
2 Geological Survey of Norway (NGU) has put the value of Norway's mineral resources to be around 
NKr 1,500 billion.   WT/TPR/S/269 Trade Policy Review 
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  the Norwegian Government's financial assets are now considerable, the accumulated pension 
liabilities are even larger.3  
5. Before turmoil broke out in the world's fina ncial markets in the second half of 2008, the 
Norwegian economy was operating at close to fu ll capacity, and growth had in any case been 
expected to slow due to capacity constraints, a turning business cycle, and measures taken to avoid 
overheating.  Noting price pressure from the labour and energy markets, Norges Bank (the Central 
Bank) continued the tightening of monetary conditions until mid-2008.4  Although Norges Bank kept 
its Key Policy Rate unchanged during the first weeks of  the global turmoil, market interest rates rose 
sharply as banks' funding became more expensiv e and the higher costs were passed onto their 
customers (Chart I.2).  The tight monetary policy, already in place to contain inflationary pressures, 
left Norges Bank with considerable scope to cut inte rest rates as growth and inflationary expectations 
changed.  Although the reaction of the domestic  financial market lagged at times, successive 
reductions in the Key Policy Rate, from 5.75% in  September 2008 to 1.25% in June 2009, brought 
market interest rates down, and provided a strong stimulus to the economy.   
6. The impact of the global financial crisis reached the labour market in late 2008, and 
unemployment began to rise, albeit from a low level.5  In order to boost growth and employment, 
the 2009 Fiscal Budget was amended in February, an d further expansionary measures were introduced 
in the revised National Budget passed in May 2009.  The Ministry of Finance estimated the intended 
overall fiscal stimulus for 2009 at 3% of non-oil GDP, making the 2009 budget the most expansionary 
budget in more than 30 years.6  Stagnating private consumption, and a sharp fall in business 
investment was to some extent offset by incr easing public consumption, and petroleum investments 
remaining at high levels.  Although Norway's GDP declined by 1.7% from 2008 to 2009 (Table I.1), 
the fall was far more modest than in other develope d countries.  Moreover, the fiscal stimulus and low 
interest rates provided a major boost to private consumption, which rebounded in 2010 and put 
Norway's GDP back on an upward trend.  With the unemployment rate levelling off at around 3.5% of 
the labour force, but still well below the 20-year averag e, the Government began to reign in the fiscal 
stimulus in its budget, bringing th e structural non-oil central government deficit in 2011 below the 4% 
rule stipulated in the Fiscal Policy Guidelines (Box I.1). 
 
                                                      
3 The Ministry of Finance has estimated the accumula ted liabilities in the pub lic pension system to 
reach NKr 5,178 billion by the end of  2012 (Fiscal Budget 2012).  This amount does not include liabilities for 
disability pensions, widow/widowers' benefits, or civil se rvants included in the State's own pension scheme.   
4 Since 2001, the Government has defined an inflation target for monetary policy in Norway.  Norges 
Bank's conduct of monetary policy is to be oriented toward s low and stable inflation.  The operational target of 
monetary policy is to be annual consumer price inflation of close to 2.5% over time.  Monetary policy is also to contribute to stabilizing output and employment.  The principal instrument to achieve these objectives is the Key 
Policy Rate, which is the interest rate on banks'  deposits (up to a quota) in Norges Bank.   
5 In the first months of 2008, the labour market had been exceed ingly tight with low unemployment 
and a record number of job vacancies.  The num ber of vacant jobs peaked in April 2008.  
6 Ministry of Finance, press release "Revised Natural Budget 2009:  continued expensionary policies", 
15 May 2009.   Norway WT/TPR/S/269 
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  0100200300400500600
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011NKr billion
Source: Statistics Norway.  Viewed at http://www.ssb.no/english/Chart I.1
(a) Net central government surplus, 1995-2011
0100200300400500600700800
Jan-95
Jun-95
Nov-95
Apr-96
Sep-96
Feb-97
Jul-97
Dec-97
May-98
Oct-98
Mar-99
Aug-99
Jan-00
Jun-00
Nov-00
Apr-01
Sep-01
Feb-02
Jul-02
Dec-02
May-03
Oct-03
Mar-04
Aug-04
Jan-05
Jun-05
Nov-05
Apr-06
Sep-06
Feb-07
Jul-07
Dec-07
May-08
Oct-08
Mar-09
Aug-09
Jan-10
Jun-10
Nov-10
Apr-11
Sep-11Price index in US$ Price index in NKr(b) Commodity Price Index  for Crude Oil, 1995-2011
(1995 Jan =100)
Source: International Financial Statistics (IFS). WT/TPR/S/269 Trade Policy Review 
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  Box I.1:  The Government Pension Fund – Global 
The Ministry of Finance is responsible for managing the Fund.  The operational management is delegated to 
Norges Bank.  The purpose of the Fund, which is a kr one-denominated acco unt with the Central Bank, is to 
facilitate government savings necessary to meet the rapi d rise in future public pension expenditures, and to 
support the long-term management of petroleum revenues.  However, the fund is not earmarked for pension 
expenditures.   
The Norwegian Parliament adopted the Act relating to the State Petroleum Fund in 1990, but the first 
transfer to it did not occur until 31 May 1996, correspo nding to the 1995 central government surplus.  The 
Fiscal Policy Guidelines introduced in 2001 geared the fiscal policy towards a gradual increase in the use of 
petroleum revenues.  Over time, the structural non-oil central government budget deficit should correspond 
to the expected real rate of return of the Fund.   
The entire capital of the Fund is invested abroad.  Th is ensures risk diversification and good financial 
returns, and helps to shield the non-oil economy.   
While the Fund's capital was initially invested only in fixed income securities, the investment mandate was 
extended to equities in January 1998, and to real esta te in March 2010.  According to the present mandate, 
the Fund's assets are to be divided between equities (6 0%), fixed income securities (35-40%), and real estate 
(up to 5%).  Geographic targets have been established for the equity portfolio (Europe 50%;  America, Africa, and the Middle East 35%;  Asia and Oceani a 15%) as well as for the securities portfolio 
(Europe 60%; America 35%, Asia and Oceania 5%).  The Fund may own up to 10% of the voting capital in 
any listed company.  A r ecent white paper (Meld. St. 17 (2011-201 2)) set plans for a new and simplified 
benchmark for the Fund's fixed income investments, incorporating GDP weighting of governments bonds;  
expanding the benchmark to include government bonds from emerging economies;  and a new geographical 
distribution of the Fund's equity investments closer to market weights.  The changes should entail proportionately more investments in, for example, emerging markets, and a reduced share of investments in 
Europe.   
The Fund is by far the largest portfolio managed in Norway and among the largest funds in the world.  The 
market value of the Petroleum Fund at 31 March 2012 was NKr 3,496 billion, an increase of 
NKr 185 billion in just three months.  The Fund also grew by Nkr 234 billion in 2011.  However, that rise 
was entirely due to the transf er of a considerable central government surplus (NKr 271 billion), as the return 
on the Fund's assets was a negative 2.5% in 2011, reflecting the weakness in global equity markets.  The 
average annual return of the Fund was 2.7% during 1997-2011, somewhat below the expected long-term real rate of return of 4% defined in 2001.   
Source: WTO (2004);  information from the Ministry of Financ e, Norges Bank;  and Norges Bank Investment 
Management (NBIM).  
7. In 2011, mainland GDP grew by 2.4%, which is ju st below the historical trend.  Norges Bank 
raised its Key Policy Rate by 0.25% to 2.25% in  May, noting that the upturn in the Norwegian 
economy had gained a firm footing.7  Although inflation remained low, and well below the Bank's 
2.5% target, capacity utilization in the economy was rising with prospects of somewhat higher 
inflation later in 2011.  Pushed by high petroleu m investment and housing construction, the economic 
outlook was robust.  Most economic indicators theref ore suggested that the Key Policy Rate should be 
raised gradually towards a more normal level.8  However, intensifying turbulence in the world's 
financial markets, lower inflation expectations globally, and a more uncertain economic outlook 
prompted Norges Bank to reverse its policy in la te 2011.  The Key Policy Rate was cut by 0.5% 
                                                      
7 Norges Bank, press release "styingsrenten økes til 2,25 prosent", 12 May 2011.  From its all-time low 
of 1.25%, the Key Policy Rate was raised by 0.25 per centage points in October 2009, in December 2009, and 
in May 2010.   
8 Norges Bank now assumes that the normal level of the key policy rate will be around 4% for the next 
few years.   Norway WT/TPR/S/269 
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  in December 2011, and a further 0.25% in March 2012.9  An appreciating Norwegian krone, posing an 
increasing challenge to Norway's exports of traditi onal (i.e. non-oil) goods, was a major factor behind 
the second cut.   
01234567891011121314151617181920
Feb-86
Oct-86
Jun-87
Feb-88
Oct-88
Jun-89
Feb-90
Oct-90
Jun-91
Feb-92
Oct-92
Jun-93
Feb-94
Oct-94
Jun-95
Feb-96
Oct-96
Jun-97
Feb-98
Oct-98
Jun-99
Feb-00
Oct-00
Jun-01
Feb-02
Oct-02
Jun-03
Feb-04
Oct-04
Jun-05
Feb-06
Oct-06
Jun-07
Feb-08
Oct-08
Jun-09
Feb-10
Oct-10
Jun-11Key policy rate 3-month NIBORChart I.2 
Key Policy Rate vs 3- month NIBOR, 1991-2011
Source: Norges Bank.  Viewed at http://www.norges-bank.no/en/Per cent
Monthly average of daily observations.  Overnight lending rates  used as key policy rates from February 
1986 to  December 1990.Note:
 
Table 1.1  
Basic economic indicators, 2008-11  
 2008 2009 2010 2011 
Nominal GDP (NKr billion) 2,560 2,357 2,523          2,711 
Nominal GDP (US$ billi on) 454 375  417 484 
Real GDP (NKr billion)a 2,061 2,027 2,040 2,073 
Real GDP (US$ billion)a 366 323 337 370 
Real growth rate (%) 0.0 -1.7 0.7 1.6 
Nominal GDP per capita (US$) 95,233 77,711 85,372 97,604 
Sectoral structure of GDP (% of total value added)      
Total industry 100.0 100.0 100.0 100.0 
Agriculture and forestry 0.7 0.7 0.8 0.7 
Fishing and aquaculture 0.5 0.7 1.0 0.8 
Mining and quarrying 0.2 0.2 0.2 0.2 
Oil and gas extraction 26.8 19.0 20.3 22.6 
Table I.1 (cont'd) 
                                                      
9 During the last months of 2011, Norwegian banks were affected by the focus on the debt situation in 
the Euro Zone and problems in European money and cred it markets as their market funding also became more 
expensive and less accessible.  Whereas the Key Policy Ra te cut in December 2011 appears largely to have 
offset the earlier squeeze on bank's margins, banks have generally passed  on the cut in March 2012 to their 
customers.   WT/TPR/S/269 Trade Policy Review 
Page 6 
  
   2008 2009 2010 2011 
Manufacturing 8.5 8.2 7.8 7.8 
     Machinery and other equipment n.e.c 2.3 2.5 2.3 2.3 
     Food products, beverages and tobacco 1.3 1.4 1.3 1.3 
     Refined petroleum, chemical and pharmaceutical products 1.1 0.9 1.0 1.2 
     Building of ships, oil platforms and modules 0.9 0.9 0.8 0.8 
     Repair and installati on of machinery and equipment 0.5 0.6 0.6 0.6 
     Basic metals 0.7 0.3 0.5 0.5 
     Rubber, plastic and mineral products 0.5 0.5 0.4 0.4 
     Wood, wood products and paper products 0.5 0.4 0.4 0.3 
     Furniture and other manufacturing n.e.c 0.3 0.3 0.2 0.2 
     Printing and reproduction of recorded media 0.2 0.2 0.2 0.2 
     Textiles, wearing apparel, leather 0.1 0.1 0.1 0.1 
Services 63.3 71.3 70.0 68.0 
     Electricity, gas and steam 2.4 2.4 2.8 2.5 
     Water supply, sewerage, waste 0.5 0.6 0.6 0.6 
     Construction 5.4 5.8 5.8 5.8 
     Wholesale and retail trade, repair of motor vehicles 8.0 8.2 7.8 7.5 
     Transport via pipelines 0.8 0.9 0.8 0.6 
     Ocean transport 1.3 1.2 0.9 0.4 
     Other transport activities 2.8 3.0 2.7 2.4 
     Postal and courier activities 0.4 0.5 0.5 0.4 
     Accommodation and food service activities 1.2 1.4 1.3 1.3 
     Information and communication 3.4 3.9 3.7 3.6 
     Financial and insurance activities 3.6 4.6 4.7 4.4 
     Real estate activities 2.4 3.0 3.0 3.0 
     Imputed rents of owner-occupied dwellings 4.1 4.5 4.4 4.3 
     Professional, scientific and technical activities 4.0 4.4 4.3 4.3 
     Administrative and support service activities 2.5 2.7 2.7 2.8 
     Public administration and defence 4.8 5.7 5.6 5.5 
     Education 4.0 4.7 4.7 4.5 
     Other public and private services 11.6 13.8 13.8 13.9 
Employment (% of total working population)      
All industries 100.0 100.0 100.0 100.0 
Agriculture, forestry and fishing 2.7 2.7 2.5 2.3 
Mining and quarrying 1.7 1.8 1.8 2.1 
Manufacturing 10.4 9.9 9.4 9.3 
Electricity, water supply, sewerage, waste management 1.2 1.2 1.2 1.3 
Construction 7.4 7.2 7.2 7.5 
Domestic trade, car repair shop 14.2 13.8 13.8 13.7 
Transportation and storage 5.4 5.3 5.5 5.7 
Accommodation and food servi ce activities 2.7 2.7 2.8 2.6 
Information and communication 3.9 3.7 3.6 3.7 
Financial and insurance activities 2.2 2.1 2.1 2.0 
Real estate, professional, scientific and technical activitie s 6.2 6.6 6.4 6.1 
Administrative and support serv ice activities 4.1 3.9 3.9 3.8 
Public adm., defence, soc. security 5.9 6.3 6.3 6.0 
Education 8.7 8.2 8.3 8.3 
Human health and social work activities 19.9 20.7 21.1 21.5 
Other service activitie s 3.5 3.9 4.1 4.0 
Unspecified 0.0 0.0 0.0 0.1 
Table I.1 (cont'd) Norway WT/TPR/S/269 
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   2008 2009 2010 2011 
Memorandum item      
Population (million) 4.7 4.8 4.9 4.9 
Unemployment rate (%) 2.6 3.2 3.6 3.3 
a Figures at constant 2005 market prices. 
Source: WTO Secretariat, based on information from Statistics Norway.  
(3) TRADE PERFORMANCE  
8. Norway's sizeable exports of crude oil and natu ral gas, combined with fluctuating but overall 
relatively high energy prices, mean that Norway has been running a surplus in merchandise trade for 
more than 20 years.  Fuels have consistently accounted for 60-70% of Norway's exports of goods 
since 2004 (Chart I.3 and Table AI.1).  Goods imports  are very diversified, the single most important 
category being machinery and transport equipment (T able AI.2).  Trade in services has been more 
balanced, but deficits in certain types of services, notably tourism and travel, have normally not been 
large enough to offset the net income derived fro m shipping and other maritime services.   
9. Over the last decade, Norway has benefited from improved terms of trade as high growth in 
Asian economies has underpinned the price of oil and traditional Norwegian export items such as 
metals and fish, while Norway has been able to source its imports of consumer goods more cheaply 
from the same Asian economies.  Although the Eur opean Union remains Norway's most important 
trading partner, still accounting for more than 80%  of Norway's merchandise exports and around two 
thirds of its imports, the trend towards increasing trad e with other parts of the world, in particular 
Asia, has continued during the review period (Chart I. 4, and Tables AI.3 and AI.4).  In services trade, 
the EU accounts for three quarters of Norway's se rvices imports, while Norway's export structure 
(particularly for petroleum-related services and financial and business services) is more globally 
oriented (Table I.2).   
10. Although labour costs matter for the competitiven ess of traditional Norwegian industries, the 
positive trend in terms of trade and productivity in creases have to a large extent made up for salary 
increases, which have been higher in Norway than in its main trading partners.  High labour costs 
nevertheless make Norway's expor ting and import-competing industries vulnerable to weaker growth 
worldwide, falling export prices, and an appreciating Norwegian krone.10   
                                                      
10 As the price of Norway's princi pal export commodity (crude oil) is denominated in U.S. dollars, 
movements in the US$/NKr exchange rate have a direct impact on the merchandise trade balance.  However, for 
trade in traditional (i.e. non-oil) goods and services, the exchange rate of the krone vis-à-vis other currencies 
such as the euro and the Swedish krona is more relevant.   WT/TPR/S/269 Trade Policy Review 
Page 8 
  
  Chart I.3
Composition of merchandise trade, 2008 and 2010
2008 2010
(a)    Exports (f.o.b.)
Other mining
13.3
Manufactures
16.7
Natural gas
20.7Other mining
13.7Machinery and 
transport equipment
9.4
Other 
manufactures
5.3
Fish  6.6
Total:   US$173.2 billion Total:  US$131.4 billion
(b)    Imports (c.i.f.)
Chemicals
8.7Other transport
equip.
9.5
Manufactures
77.6Office machines &
telecom.  equip.    
7.2 Other electrical
machines
4.5Other non-electrical 
machinery    
10.7
Other manfactures
8.7
Other mining
8.1Fuels
4.7Automotive 
products
7.9Other non-
electrical
machinery 
8.3
Automotive 
products
8.7Other  1.6Other electrical 
machines  4.4
Other semi-manuf.   
8.8Other transport 
equip.
8.4
Chemicals
9.6Manufactures
74.8Office machines &
telecom. equip.  
7.6
Total:   US$90.6 billion Total:   US$77.3 billion Per cent
Manufactures
18.2
Crude oils
35.7Natural gas
22.5
Other consumer
goods   11.3Other  0.9Mining  70.2
Crude oils
38.6Other  4.0
Agriculture 
1.1Machinery and 
transport equipment
9.1
Source :  UNSD, Comtrade database (SITC Rev.3).Other  consumer
goods  10.9Mining
14.2Other 
manufactures
5.3
Other semi-manuf.
9.4Mining  74.4Agriculture  0.9
Agriculture
9.4Agriculture
8.6
Mining
12.9Chemicals 
2.4Chemicals 
3.5
Other  4.1
Other manufactures
7.6
Other mining
7.7Fuels
6.5Fish  3.9
 Norway WT/TPR/S/269 
 Page 9 
 
 
  Chart I.4
Direction of merchandise trade, 2008 and 2010
2008 2010
(a)    Exports (f.o.b.)
Other Europe 
1.4Europe
85.1
Total:   US$173.2 billion Total:  US$131.4 billion
(b)    Imports (c.i.f.)
Other
2.2Other Europe
2.2
EU27
66.9
United States
5.4CIS
2.8
Asia
13.7China 6.4
Korea, Rep. of 1.3EU27
63.3Asia
18.0China 
8.5
Other Asia
6.5
United States
5.5
Total:   US$90.6 billion Total:   US$77.3 billionPer cent
Europe
82.3
Asia  
7.1
Korea, Rep. of
3.0United States
4.3
CIS
3.1United States
5.0
Source :  UNSD, Comtrade database.EU27
80.9
Europe
65.5Europe
69.1
Other
2.0EU27
83.7
Other America
2.9
Other Europe 2.2Other America
3.4
Other America
6.9Other America
6.0Other Asia
6.0Other Europe
1.4
Other
2.7Other
2.4Asia
4.8
 WT/TPR/S/269 Trade Policy Review 
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  Table I.2  
Trade in services by geographical breakdown, 2010  
(%) 
 EU(27) Other 
European 
countries North 
America Central 
& 
South 
America Africa Asia 
& 
Oceania Unallocated World 
Services exports 63.4 2.8 8.9 4.3 5.9 13.5 1.2 100 
Sea transport 65.3 2.1 6.7 6.4 4.3 15.2 0.0 100 
Other transport and communication 72.2 3.0 7.6 5.0 1.5 10.8 0.0 100 
Travel 86.7 2.8 4.8 0.3 0.1 1.8 3.6 100 
Financial and business services 55.4 4.7 14.8 3.5 5.6 15.4 0.5 100 
Petroleum activities, various services  32.1 1.0 9.7 8.5 24.4 22.9 1.3 100 
Pipeline transport 100.0 .. .. 0.0 .. .. 0.0 100 
Other services 63.7 2.7 8.6 1.2 3.2 15.0 5.6 100 
Services imports 74.2 3.3 7.5 3.4 1.4 6.7 3.3 100 
Sea transport/ operating costs 61.6 2.6 7.7 7.5 4.0 16.6 0.0 100 
Other transport and communication 79.0 5.8 7.4 0.5 0.7 6.6 0.0 100 
Travel 89.9 3.4 1.9 0.7 1.5 2.5 0.0 100 
Financial and business services 69.6 4.4 14.5 3.8 0.4 7.3 0.0 100 
Petroleum activities, various services  73.6 0.8 9.4 10.8 0.4 3.9 1.0 100 
Other services 45.6 2.3 9.1 0.5 0.5 6.9 35.2 100 
.. Not available. 
Source:  WTO Secretariat, based on information from Statistics Norway. 
11. High energy prices, especially in the first half of  the year, helped Norway to an all-time high 
level of exports (and imports) and a surplus on th e current account equal to 16% of GDP in 2008, 
roughly on par with the surplus in the preceding thr ee years (Table I.3).  The sudden and precipitous 
drop in the price of crude oil, from US$145 per barrel in July 2008 to US$40 in January 2009, together with falling prices for other commoditi es, had a significant impact on Norway's exports 
in 2009.
11  Falling world demand for transport services and lower shipping rates also reduced 
Norway's exports of maritime transport services by 9%  (in value) compared with 2008.  However, 
reduced foreign demand also meant lower imports, fo r example of raw materials for Norway's metal 
industry.  Furthermore, lower domestic consumer  demand for durable goods, notably motor vehicles, 
also contributed to a significan t decline in Norway's imports.12  As the expected fall in global energy 
demand did not materialize, and energy prices thus stabilized and resumed their upward trend, 
Norway was able to record a current acc ount surplus in excess of 10% in 2009.   
12. Imports and exports expa nded in 2010, returning to the 2007-level.  The rise in exports was 
broad-based.13  Exports of fish (principally fresh, farmed  salmon) set a new record (NKr 53.7 billion).  
Imports rose by 8.5%, pushed by increasing demand for motor vehicles, ores and scrap metal, and electricity.  However, Norwegian imports of mach inery lagged well behind the pre-crisis levels.  
Excluding the shipping industry, Norway's impor ts of services rose by 15% from 2009 to 2010, while 
exports of (non-shipping) services jumped 20%.   
                                                      
11 The oil price referred to in the text is the quote for Brent blend, which is more relevant than West 
Texas Intermediate (WTI) for Norwegian exports.   
12 Imports were also affected by a decline in the value of the Norwegian krone.  As capital worldwide 
fled to the world's major currencies in the midst of the global financial crisis, the krone hit an all-time low 
against the euro in December 2008 (NKr 10.10 per euro  intraday).  Against the U.S. dollar, the nominal 
exchange rate reached levels not se en since 2003.  The depreciation su bsequently abated, but the effect 
remained through most of 2009.   
13 Due to exports of crude oil, the United Kingdom was (by far) Norway's principal export market.  
Sweden and Germany were the primary markets for goods exported from mainland Norway.   Norway WT/TPR/S/269 
 Page 11 
 
 
  Table I.3 
Balance of payments, 2008-11 
(US$ million)a 
 2008 2009 2010 2011 
Current account balance 72,441 40,519 51,868 70,610 
Balance of goods and services 78,378 42,776 51,708 67,309 
Balance of goods 78,252 41,560 50,977 64,995 
Balance of services 126 1,216 731 2,313 
Exports, total 212,397 147,908 171,732 203,538 
Goods 169,557 112,249 128,857 157,783 
Crude oil and natural gas 110,401 66,233 77,941 99,887 
Other goods 59,156 46,016 50,916 57,896 
Services 42,840 35,660 42,875 45,754 
Imports, total 134,019 105,132 120,024 136,229 
Goods 91,305 70,688 77,880 92,788 
Ships 4,994 2,659 3,884 2,354 
Other goods 85,695 66,909 73,789 .. 
Services 42,714 34,444 42,144 43,441 
Balance of income and current transfers -5,937 -2,257 160 3,301 
Compensation of employees and investment  income, net -2,096 2,144 4,998 8,504 
Current transfers, net -3,841 -4,401 -4,838 -5,203 
Capital account -202 -178 -210 -267 
Financial account -72,380 -53,491 -44,442 -87358 
         Direct investment, net -5,054 -16,139 -5,566 -16,248 
         Portfolio investment, net -116,418 852 -17,585 -44,814 
         Other investment, net 53,010 -49,570 -17,911 -29,817 
         International reserves -3,918 11,366 -3,379 3,521 
Statistical discrepancy, ne t 141 13,150 -7,217 17,016 
Memorandum item (%)      
          Current account / GDP 15.9 10.8 12.4 14.6 
          Balance of goods / GDP 17.2 11.1 12.2 13.4 
.. Not available. 
a Central Bank used exchange rate (NKr/US$). 
Source:  WTO Secretariat, based on information from Statistics Norway.  
13. With further increases in the price of crude oil and natural gas, exports of goods grew faster 
than imports in 2011 (14% versus 11%).  After se ven years of continuous rise, fish exports fell 
slightly in 2011.14  Major investment projects in Norway pushed up imports of transport equipment 
and machinery.  Norway's exports of services fell sl ightly, but less than the decline in imports (-1% 
versus -4%).   
14. The high domestic prices of food products a nd certain services (e.g. car repair and dental 
treatment), and excise taxes on alcoholic beve rages and tobacco, which are higher than in 
neighbouring countries, provide a considerable incen tive for border trade.  Statistics Norway, which 
began tracking day-trip purchases in 2004, estimates  their value to have risen by 30%.  In 2011, 
                                                      
14 The decline was due entirely to lower prices for salmon.   WT/TPR/S/269 Trade Policy Review 
Page 12 
  
  Norwegians are thought to have brought back goods worth NKr 11.5 billion from short, purchase-
motivated trips, up by 9% from 2010.  Almost  94% of the purchases are made in Sweden.15   
(4) OUTLOOK  
15. Data for the first months of 2012 indicate a steady rise in economic activity.  Nevertheless, 
the economic outlook is clouded by the sombre ec onomic performance in some European countries.  
Norway has so far been relatively unaffected by th is turbulence, and its exposure to the most debt-
prone European countries is modest.  However, as a generally open economy, Norway cannot be 
considered immune to external problems. 
16. Norway's labour force amounted to more than 2.6 million persons in 2011, an increase of 1% 
in one year and 7.5% since 200616;  as growth in employment is higher, the unemployment rate is 
declining steadily towards 3%.17  General optimism among households and businesses suggests 
further growth in private consumption and investme nt in the years to come.  Investments in the 
offshore petroleum sector, which have doubled since 2004, are expected to remain strong. 
17. Opinions differ as to whether a long period of lo w nominal interest rat es has created an asset 
bubble in the housing market, which may eventually burst and trigger a downward spiral in the real 
mainland economy.18  Household debt is at an all-time hi gh.  Continued job growth and migration 
towards Norway's major cities point towards furt her tight conditions in local housing markets.19  The 
absence of global inflationary pressures means that Norway is not importing inflation at present, and 
recent upward pressure on Norway's exchange rate lim its the scope for Norway to maintain interest 
rates that are out of step with other industrialized  countries.  Norges Bank has therefore been lowering 
its expectations for future interest rate in creases.  Although the economic outlook overall appears 
positive, there is no doubt that Norway's mainland econom y is vulnerable to interest rate hikes or a 
sudden fall in economic activity and employment.   
                                                      
15 Statistics Norway bases its research on sample surveys.  The quarterly data are not considered 
sufficiently reliable, but the annual figures are thought to be reasonably accurate.   
16 Statistics Norway, "Økonom iske analyser", 1/2012. 
17 However, the labour force is reduced by a relatively high share of the working age population being 
declared unfit for work.  From 2000 to 2010, the share of disability and early retirement beneficiaries in the 
labour force rose from 8.5% to 10.2%.  Furthermore,  among those who work, absence due to illness is higher 
than in other OECD countries and difficult to explain on the basis of comparable pub lic health indicators.   
18 At the height of the global turmoil in 2008/09, there was only a temporary fall in house prices in 
Norway.  However, the number of transactions fell and the time to complete each sale increased.  This was 
partly because banks temporarily suspended their "bridge" financing, i.e. allowing the acquisition of a new 
dwelling before the existing dwelling has been sold (or even put on the market).   
19 Increased construction of housing units may relieve so me of the pressure, but only with a time lag.