Norway’s trade balance surplus fell by 53 percent from 2022 to 2023, and the level in the fourth quarter was 118 billion lower than the quarter the previous year. The surplus’s remains elevated compared to historical levels. The main reason for the large surplus was large export income from petroleum.
- Current account balance was reduced by 31 percent compared to the fourth quarter of last year.
- The trade balance weakened by 36 percent in the same period.
- An enormous growth in Norway's net foreign assets, increasing by about NOK 3 700 billion, up 32 per cent compared to the end of 2022.
- This strong growth was primarily due to significant market price gains on stocks because of a robust global stock market performance in 2023, along with a continuation of significant net financial investments in 2022.
Lower trade balance surplus year to year
The balance of trade in goods and services, also known as the trade balance, showed a surplus of NOK 215 billion in the fourth quarter of 2023, down from the NOK 334 billion observed in the fourth quarter of last year. The fall in the surplus on the trade balance was thus 54 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 remains elevated compared to pre pandemic levels.
In total, Norway exported goods and services worth NOK 641 billion in the fourth quarter of 2023. This is a reduction of NOK 119 billion compared to the same period the previous year, and a percentage decrease of 16 percent. Goods exports decreased by 20 per cent, while service exports increased by 6 per cent.
Norway imported goods and services worth NOK 426 billion in the fourth quarter of 2023. Basically, unchanged from the same quarter of the previous year. Imports of goods fell by 6 per cent, while imports of services increased by 12 per cent compared to the same period the previous year. The rise in service imports was largely due to increased international travel activity.
For information on volume and price developments in exports and imports as well as seasonally adjusted figures, see quarterly national accounts.
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).
Moderate surplus on the balance of income and current transfers
The interest and current transfers balance showed a surplus of NOK 155 billion in 2023, 46 percent stronger than in 2022. The surplus on the income and current transfers amounted to 4 per cent of Mainland Norway's GDP in 2023.
Interest payments show strong growth on both the expenditure and income side. Norway's interest income increased by 60 percent. Norway's interest expenses increased by 127 percent compared to 2022. Higher interest rates in Norway and internationally are an important reason for the increase in interest payments.
Transfers to abroad ended at 32 billion in the fourth quarter of 2023, representing an increase of 30 percent compared to the same period last year. This increase is partly due to increased international aid and transfers to the Ukraine.
The current account balance showed a surplus of NOK 233 billion in the fourth quarter of 2023. In increase of 31 percent as compared to the last quarter of last year.
Enormous increase in the financial account
The net foreign assets have grown by 32 per cent in 2023 compared to the end of 2022. That corresponds to an increase from NOK 11 586 billion to NOK 15 284 billion in 2022, which is Norway’s highest net foreign assets ever recorded. The rise of approximately NOK 3 700 billion is mainly due to market price gains of about NOK 2 130 billion, significant net lending/financial account transactions of about NOK 1 050 billion, and exchange rate gains of about NOK 440 billion.
The figure shows the development in Norway's net foreign assets, net lending and net other changes.
As the graph shows, net assets had a very strong increase in 2023. Primarily this comes from remarkably strong gains in the 1st quarter, i.e. gains in form of market price gains (weaker Norwegian Krone) and exchange rate gains (growth in the stock markets).
Strong investment level
The total net lending ended at about NOK 1 050 billion. Historically, this is very high, just beaten by the net lending in 2022 at NOK 1 420 billion. The Government Pension Fund Global is the main contributor to the net lending and has thus maintained the high investment level in stocks and other securities as we saw in 2022.
Huge market price gains
There were net gains of about NOK 2 700 billion in 2023. This are largely due to the solid growth in global stock markets in 2023. This is a huge change compared to the enormous net loss of about NOK 1 460 billion in 2022. Since most of Norway's foreign wealth is in stocks, a solid increase in stock markets leads to a significant increase of this wealth.
Current account In this publication, the period 1st quarter 2022 to 3rdquarter 2023 has been revised. Financial account From 4th quarter 2021 onwards, significant changes have been made on Other accounts receivable /payable under Other investments, both for Foreign assets and Liabilities. The numbers are revised down for all the quarters and affects both positions and transactions.
Revision of the national accounts time series Like many European countries, Norway will complete a revision of the national accounts in 2024. Balance of Payments statistics is an integral part of the national accounts and will be revised in line with the core national accounts. The aim of the revision is to incorporate new information, improve methods and correct errors in back data. According to the schedule, revised time series will be released in early December 2024.