Norway flag Norway: Economic outline

Economic Outline

Economic Indicators

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) 593.73485.51526.95554.78564.34
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 108,43987,73994,66099,064100,171
General Government Balance (in % of GDP) -9.5-9.6-10.1-10.3-10.2
General Government Gross Debt (in % of GDP) 36.341.838.035.534.3
Inflation Rate (%)
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) 179.1086.06102.59114.69105.07
Current Account (in % of GDP) 30.217.719.520.718.6

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: July 2024