Main points:

  • Net lending¹ in the current account halved compared to the second quarter of last year
  • The trade balance weakened due to lower prices for petroleum exports
  • Higher interest rates have resulted in greater interest income and expenditure for the country
  • Norway’s net foreign asset grew in the second quarter of 2023
  • Mostly gains in the global stock markets contributed to the increase in the value of net foreign assets.

¹ Net fiancial investment" was changed to "net lending" at 09.55 am on 6 September 2023.

Lower trade balance surplus

The balance of trade in goods and services, also known as the trade balance, showed a surplus of NOK 134 billion in the second quarter of 2023, down from NOK 328 million observed in the second quarter of last year. The fall in the surplus on the trade balance was thus 59 per cent. The fall in the surplus on the trade balance is particularly driven by lower natural gas prices, compared to last year. The surplus on the trade balance was in the second quarter at the level of the highest observations in the period before the fall in oil prices in 2014.

In total, Norway exported goods and services worth NOK 553 billion in the second quarter of 2023. This is a reduction of NOK 149 billion compared to the same period the previous year, and a percentage decrease of 11 percent. Goods exports decreased by 27 per cent, while service exports increased by 5 per cent. Important positive contributions to Norwegian exports came from goods other than petroleum and ships, and financial and business services.

In comparison, Norway imported goods and services worth NOK 419 billion in the second quarter of 2023. Imports thus increased by 12 per cent. Imports of goods increased by 8 per cent, while imports of services increased by 21 per cent compared to the same period the previous year. The rise in service imports is largely due to increased travel traffic.

The weakening of the krone exchange rate contributed to higher import prices.

For information on volume and price developments in exports and imports as well as seasonally adjusted figures, see quarterly national accounts.

Figure 1. The current account
Figure 1. The current account

The figure shows (1) the Balance of goods and services, (2) the Balance of income and current transfers and (3) the current account balance (1+2).

Source: Balance of Payments, Statistics Norway

Increased surplus on the balance of income and current transfers

The interest and current transfers balance showed a surplus of NOK 37 billion in the second quarter of 2023, NOK 23 billion higher than in the same period in 2022. The surplus on the income and current transfers amounted to 4 per cent of Mainland Norway's GDP in the first quarter of 2023.

Interest payments show strong growth on both the expenditure and income side. Norway's interest income was NOK 92 billion in the second quarter, up from NOK 37 billion in the same period last year. Norway's interest expenses were NOK 59 billion, up from NOK 20 billion in the second quarter of 2022. Higher interest rates in Norway and internationally are an important reason for the increase in interest payments.

Increased net foreign assets

Norway’s net foreign assets, or net International Investment Position (IIP), amounted to NOK 14 820 billion at the end of the 2nd quarter of 2023. Net assets were amounted to NOK 13 700 billion at the end of the 1st quarter of 2023 and thus increased by NOK 1 120 billion or 8 percent during the quarter.

The development in Norway’s net foreign assets, i.e net IIP, is illustrated in the figure. Changes in net IIP is explained by net lending/borrowing and other changes.

Figure 2. Integrated IIP statement
Figure 2. Development in Norway's net foreign assets

The figure shows the development in Norway's net foreign assets, net lending and net other changes.

Source: International accounts, Statistics Norway

Gains in the global stock markets

As indicated by the blue line in the figure, net assets have continued to rise in the second quarter of 2023. It was particularly gains in the global stock markets that contributed to the increase. These gains are included in other changes, which also includes gains and losses due to exchange rate changes. The weakening of the Norwegian krone had effects on the rise in net assets, as well.

Net lending

 Net lending amounted to NOK 263 billion at the end of the second quarter of 2023. It was the Government Pension Fund Global that contributed to net lending instead of net borrowing, through its investments in shares and other securities abroad.

The Financial Account is revised back to the first quarter of 2022. The current acount is revised for first quarter of 2023.