Starting in the second half of 2021 the Norwegian current account has seen a paradigm shift, showing substantially stronger current account surpluses. This goes even for times with high petroleum prices in the past. Compared to the third quarter of last year the current account surplus strengthened by NOK 420 billion. 

Norwegian kroner weakened by two percent through the quarter as measured by the central bank’s trade weighted index. This weakening contributed to increased import values, as measured in NOK. Broad based inflation among Norway’s trading partners also contributed to increased import values.

Record surplus on Norway’s trade balance

In total, Norway exported goods and services worth NOK 949 billion in the third quarter of 2022. This is an increase of NOK 254 compared to the previous quarter and NOK 496 higher than the same period last year. Over the latest 12-month period, this represents more than a doubling of Norwegian exports.

The balance of goods and services (the trade balance) showed a surplus of NOK 532 billion in the third quarter of 2022, corresponding to 60 per cent of Norwegian Mainland GDP. Norway’s trade balance surplus in the third quarter of 2022 was NOK 227 billion higher compared to the previous quarter. Compared to the same period last year the surplus grew by NOK 393 billion, representing a growth rate of 283 percent. Higher prices on petroleum exports was the main reason behind Norway’s strong trade balance. Compared to the same quarter last year, the value of Norwegian petroleum exports grew by NOK 423 billion, or 184 percent.

Goods, other than petroleum and ships, pulled towards increased exports. The increase from the same period last year was NOK 42 billion, which corresponds to a growth of 35 percent. Examples of goods that achieved higher growth in export values were refined oil products and electric power.

Exports of services had significant growth. Compared to the third quarter of 2021 exports of services grew by 42 percent. Shipping gross freight exports grew by NOK 16 billion since the third quarter of 2021, reflecting increased activity in shipping. Higher number of tourists visiting Norway helped boost the export of travel. Exports of aviation, transport and transport related services showed significant growth and help boost exports.

Norway imported goods and services worth NOK 416 billion in the third quarter, representing an increase of 33 percent, compared to the same period of last year. This is NOK 27 billion more than the previous quarter and NOK 103 billion more that the same quarter last year. Norwegian imports consisted of 65 percent goods and 35 percent services.

Import of travel represents costs that Norwegians accrue while travelling abroad. This figure increased by NOK 34 billion, or 260 percent as compared to the same period of last year. Import of air travel correspondingly grew by 88 percent. In line with increased shipping activity, maritime operating expenses abroad contributed to increased imports.

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

The balance of income and current transfers slightly weaker

The balance of income and current transfers surplus grew in the third quarter ending at NOK 38 billion, eleven billion stronger compared to a year ago. The surplus on the balance of income and current transfers represents four percent of Norway’s mainland GDP.

On the income side, interest income items showed relatively high growth compared to the same period last year, as the interest rate levels have increased internationally. The item interest income is up by NOK 18 billion and interest income on other investments has increased by NOK 15 billion.

Changes on the expenditure side are also driven by interest expenses. Interest paid and other investments, interest payable grew by NOK 15 and 16 billion respectively, compared to the third quarter of last year. Dividend payments abroad have fallen by 14 billion over the latest 12-month period.

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 foreign assets amounted to NOK 22 168 billion at the end of the third quarter in 2022. Corresponding, the foreign liabilities was NOK 10 636 billion. Hence, the net foreign assets amounted to NOK 11 531 billion at the end of the third quarter. As the figure below display, this is an increase of NOK 721 billion since the previous quarter. In comparison, the net assets decreased in the two preceding quarters.

Main figures in the financial account in the third quarter:

  • Net assets rose from NOK 10 753 billion in the second quarter to NOK 11 521 billion in the third quarter.
  • Net lending, which is net acquisition of financial assets abroad less net incurrence of liabilities, corresponded to NOK 545 billion. 
  • Other changes, which is mainly changes due to exchange rates and other price changes (market prices), amounted to NOK 233 billion.

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.

Record high net lending

From the figure above, we see that net lending ended on NOK 545 billion during the third quarter. This means that it was conducted more net acquisitions of financial assets than net incurrence of liabilities through the quarter. This is the highest net lending ever recorded. The high figure is explained by Norwegian investors doubling their investments abroad compared to the last quarter. It was the sector General government, including The Norwegian Government Pension Fund Global, which was the main source behind the rise, conducting financial investments abroad for NOK 647 billion during the third quarter.

Weaker Norwegian krone increased net assets

The third quarter was characterized by volatility in global financial markets, and this affected the value of Norway’s financial investments abroad. As a result of lower market prices, the value of financial investments abroad decreased by NOK 568 billion during the quarter. Especially Equity and Investments Fund shares under Portfolio Investments experienced a significant reduction in value due to lower market prices, with a decrease greater than NOK 400 billion.

Still, the net effect from other changes contributed to increase the net assets in the third quarter. Due to a weaker Norwegian krone, the value of assets held in foreign currencies increased during the quarter, measured in Norwegian kroner. Thus, the net effect from other changes was NOK 233 billion in the third quarter.

The trade balance has been significantly revised from 2020 up until the second quarter of this year. The most significant revision involves an upward adjustment of the trade balance surplus by NOK 33 billion in 2021 and NOK 123 billion for the first two quarters of the current year. The revision is mainly based on new price information for natural gas.

The balance of income and current transfers was also revised for 2021 and the two first quarters of 2022. Dividend payments both to and from Norway has been revised up sharply. The combined effect of these revisions is lower the surplus by NOK 86 billion in 2021 and NOK 34 billion in the first half of 2022.

The Financial Account is revised back to the first quarter of 2021.