Substantial trade balance surplus

The balance of goods and services showed a surplus of NOK 303 billion in 2022’s first quarter, representing 35 per cent of Norwegian Mainland GDP. This improvement follows a strong surplus growth in the balance of trade during 2021. Compared with the first quarter of last year, the trade balance grew by NOK 240 billion, a growth rate of 378 per cent. Compared with the previous quarter, the final quarter of 2021, the trade balance surplus grew by NOK 49 billion, representing a growth rate of 19 per cent.

A higher export price on petroleum products was the main driver behind the strengthening of the trade balance. Compared with the first quarter of last year, the value of Norwegian exports grew by NOK 255 billion, or 186 per cent. Other goods also contributed to the growth in exports. Electric power exports grew both in volume and value. Imports also grew, albeit to a much lesser extent than did exports. Imports of goods grew slightly more than did imports of services. The most significant contributor to the growth in imports of services was travel. Travel abroad is still at a significantly reduced level compared with the time before the pandemic but is now showing signs of normalization. Imports of travel represents costs that Norwegians accrue abroad.

While the growth in exports is closely tied to petroleum prices, and in the first quarter especially to uncertainty related to Russian deliveries of natural gas to continental Europe, the growth in imports is partly a result of a normalization of economic activity after the pandemic and a reflection of the price increases of important inputs into global production lines, such as commodities and energy.

Stable balance of income and current transfers

The balance of income and current transfers remained stable relative to the same period last year, with a surplus of NOK 38 billion. Over time, increased income on securities held by the Government Pension Fund Global has resulted in consistent surpluses on the balance of income and current transfers. However, during the first quarter of 2022 many security prices fell, resulting in lower net asset values for the fund, which is shown in the Financial account mentioned below.

Current account balance improvement

With improvement in the trade balance and a stable balance of income and current transfers, the current account also showed a substantial surplus of NOK 341 billion. Compared with the same period last year, this is an improvement of NOK 237 billion.

For more information about exports and imports, including price and volume considerations and seasonal adjustments, please see the 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).

The financial account

Norway’s net International Investment Position (IIP), in the first quarter of 2022, reflects the volatile world economy. After years of steady growth, the value of Norway’s net foreign assets hit a reduction of NOK 683 billion, in just one quarter, due to considerable changes in market prices and exchange rate prices.

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.

Other changes

After a year with positive growth, the recent incidents in the world economy have led to large disturbances in the global stock markets. Norway’s net foreign assets have suffered a loss of NOK 1,1 billion due to other changes, illustrated by the black bar in the figure above. These changes are mainly explained by movements in equity securities, debt securities and investment fund shares. The Government Pension Fund Global (GPFG), alone, suffered a loss in the value of portfolio investments of approximately NOK 740 billion in the first quarter, because of declining market prices.

Financial transactions

This quarter stands out as net lending and other changes go in opposite directions, and the positive net financial transactions are the largest in two years, amounting to NOK 319 billion. General government including GPFG contributed the most, however non-financial corporations also made considerable investments abroad. Norwegian banks and credit institutions increased their holdings of currency and deposits but at the same time increased their liabilities, giving minimal effect on net lending.