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Weaker surplus in the balance of goods and services

Published:

The balance of goods and services is weakened both measured against last quarter and against the same quarter in the previous year. Looking at the development from the previous quarter the decline in exports was caused by a drop in the income from exports of oil and natural gas. This is mostly due to price changes on these commodities.

Despite a weaker balance of goods and services the total current account balance is growing measured against the previous quarter, according to updated figures from balance of payments. This is due to a strong development in the balance of income and current transfers, which to a large extent is characterized by seasonal variation. Measured against the same quarter in the previous year the current account balance is almost NOK 10 billion lower. Still the current account balance ends at NOK 68 billion in 1st quarter of 2019.

Exports and Imports

Looking at total export compared to 4th quarter of 2018 we see a clear decline of NOK 16 billion. As already mentioned this is mainly due to a drop in the export of oil and gas where the reduced prices play an important role. If we, however, compare the total export with the same quarter in previous year, the development is the opposite, up NOK 16 billion. Measured this way the development in exports of oil and gas is less important, while export of services is more important.

The imports could be examined in the same manner. The total imports have dropped by NOK 8 billion measured against previous quarter, where the total imports exceeded NOK 300 billion. However, compared to 1st quarter of 2018 there was a NOK 28 billion growth on total imports. This growth was driven by imports of “Other goods” while comparing with previous quarter the decline was driven by imports of services, and in particular the seasonal sensitive item “Travel” which decreased by almost NOK 4 billion.

 For more information about export and import, including price and volume considerations and seasonal adjustments, please see the quarterly national accounts.

Income and current transfers

When it comes to primary income and secondary income to- and from abroad in 1st quarter 2019 there was a modest growth in the sum of these two items related to the 1st quarter in 2018. Preliminary calculations show that the income to Norway was a bit higher than the income to abroad, leaving the balance of income and current transfer almost NOK 3 billion higher than the same period in 2018.

Revisions

Both current account and financial account has been revised for 2018. The balance of goods and services is revised downwards NOK 1701 million for 2018, while the balance of income and current transfers is revised upwards NOK 1684 million. This results in a revised current account balance of NOK 17 million down for 2018 in total. The revision of each end every quarter can of course be higher.

Figure 1

Figure 2. The current account