International accounts, Q2 2005

Oil prices fuel trade balance

According to preliminary figures, the balance of goods and services was NOK 71 billion in the second quarter of 2005. The balance of goods and the balance of services ended at NOK 67 billion and NOK 4 billion respectively. Compared with the second quarter last year the goods and services balance rose by NOK 14 billion, the most important single factor being the rise in oil prices.

The balance of trade in services was reduced in the second quarter of 2005 compared with the previous quarter and the second quarter of 2004. While total exports of services increased from the second quarter of last year, the total value of imports of services increased more than the exports. Both exports and imports of oil related services increased, while imports of operating costs in shipping, travel abroad and business services also increased from the corresponding quarter last year.

Compared with the first quarter this year the reduced surplus on the services balance is mainly due to growth in travel imports.

High dividends to abroad

The balance of income and current transfers is estimated at a deficit of NOK 7 billion for the second quarter of 2005, an improvement from the second quarter of last year. However, an increase in dividends paid to abroad resulted in a higher deficit compared with the first quarter this year.

Extensive portfolio investments abroad

On the financial account, the Norwegian portfolio investments abroad, exceeding NOK 240 billion, were substantially higher than non-resident portfolio investments in Norway. Outward direct investments were also higher than inward investments, according to the preliminary figures for the second quarter of 2005.

Preliminary estimates show that Norway's net external assets increased by NOK 84 billion in the second quarter of 2005 and were estimated at just over NOK 1 200 billion at the end of the quarter.

Revision of first quarter

The current account surplus for the first quarter of 2005 has been revised slightly upwards. On the financial account, Norwegian investments abroad and foreign investments in Norway have been revised upwards due to updated information and improved estimation procedures on market values of shares and securities.

As of the first quarter of 2005, the Norwegian Balance of Payments statistics are released on a quarterly basis due to a fundamental change in the data collection system. Previously, monthly data on bank payments between residents and non-residents were used. Now data are collected directly from the various residents engaged in economic transactions with non-residents. This change means that users should be more careful in comparing the data for 2005 with data from previous periods. The figures for merchandise trade are not affected by the change.