Norway: Staff Report for the 2007 Article IV Consultation: Supplementary Information

International Monetary Fund

doi:10.5089/9781451829808.002.A003

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Norway: Staff Report for the 2007 Article IV Consultation: Supplementary Information

Author: International Monetary Fund

Publication Date:: 11 Jun 2007

eISBN:: 9781451829808

Language:: English

Keywords:: ISCR; CR; state; fiscal policy framework; estimate; rate; Government Pension Fund-Global; oil revenue; term budget; staff supplement; staff appraisal; Budget planning and preparation; Oil; gas and mining taxes

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This 2007 Article IV Consultation highlights that the Norwegian economy is set to grow strongly in 2007 for the fourth consecutive year. This economic performance is underpinned by strong monetary and fiscal policy frameworks. External demand, both for petroleum products and other Norwegian exports, is strong. Rapid credit growth, rising house prices, and tight labor markets are supporting domestic demand. Unit labor cost increases and core inflation have been subdued, although rapidly rising employment and increasing reports of labor shortages and wage drift indicate intensifying pressures.

Abstract

1. This staff supplement reports on the Norwegian mid-term budget, released on May 15, 2007. It does not change the thrust of the staff appraisal. The PIN is also attached.

2. Revised 2006 fiscal estimates show that the central government non-oil structural deficit was only very slightly larger than 4 percent of the assets of Government Pension Fund-Global (GPF), by Nkr 0.5 billion. The difference with respect to the original budget, which had indicated a somewhat larger overshooting of Nkr 7.3 billion (0.5 percent of mainland GDP), reflects more buoyant revenue.

3. This deficit is set to be 3.8 percent of GPF assets in 2007, which will leave it below 4 percent for the first time since the fiscal guidelines were put in effect in 2002. This overperformance is in line with staff advice. Nevertheless, the rapid increase in GPF assets will make room for significant fiscal expansion, underscoring the authorities’ and staff’s concern regarding increases in fiscal deficits owing to rapidly rising GPF assets. In the absence of tax cuts, real government spending is set to rise by 3¾ percent in 2007, and the general government structural deficit, as estimated by staff, by ⅔ percent of GDP.

4. The attached tables have been updated in light of the revision to the 2007 budget.

Central Government Fiscal Position Under Different Oil Prices, 2002-10

(In percent of mainland GDP; unless otherwise specified)

Sources: Ministry of Finance; and IMF staff estimates.

Central Government Fiscal Position Under Different Oil Prices, 2002-10

(In percent of mainland GDP; unless otherwise specified)

								Projections
									Based on the 4-percent rule
			2002	2003	2004	2005	2006	2007	2008	2009	2010
			Based on the 2007 revised National Budget projections
Structural non-oil balance			-3.2	-3.6	-3.5	-3.6	-3.6	-4.2	-5.2	-5.7	-6.2
4 percent of GPF assets			-2.0	-1.9	-2.5	-2.8	-3.6	-4.4	-5.2	-5.7	-6.2
Non-oil expenditures			46.4	45.1	44.5	43.5	42.4	43.2	44.3	45.8	46.5
	Increase in real terms
		(applying mainland GDP deflator)	13.0	-1.5	3.1	2.0	2.0	3.8	5.4	5.4	3.7
Government Pension Fund (GPF) assets
	(in percent of mainland GDP)		49.4	66.4	74.6	96.1	114.1	134.2	146.9	160.1	…
Oil price assumption (in Norwegian krone)			197.9	204.4	254.1	343.5	411.8	370.0	358.0	334.6	323.0
			Higher oil price scenario (20 percent more than in the revised 2007 budget projections)
Structural non-oil balance			-3.2	-6	-3.5	-6	-6	-4.2	-5.3	-6.0	-6.6
4 percent of GPF assets			-2.0	-1.9	-2.5	-2.8	-3.6	-4.4	-5.3	-6.0	-6.6
Non-oil expenditures			46.4	45.1	44.5	43.5	42.4	43.2	44.5	46.0	46.9
	Increase in real terms
		(applying mainland GDP deflator)	13.0	-1.5	3.1	2.0	2.0	3.8	5.7	5.6	3.9
Government Pension Fund (GPF) assets
	(in percent of mainland GDP)		49.4	66.4	74.6	14.11	114.1	138.0	153.8	169.9	…
Oil price assumption (in Norwegian krone)			197.9	204.4	254.1	343.5	411.8	444.0	429.6	401.5	387.6
			Based on WEO projections
Structural non-oil balance (WEO)			-3.2	-3.6	-3.5	-3.6	-3.6	-4.2	-5.0	-5.8	-6.5
4 percent of GPF assets			-2.0	-1.9	-2.5	-2.8	-3.6	-4.4	-5.0	-5.8	-6.5
Non-oil expenditures			46.4	45.1	44.5	43.5	42.4	43.2	44.2	45.8	46.8
	Increase in real terms
		(applying mainland GDP deflator)	13.0	-1.5	3.1	2.0	2.0	3.8	5.1	5.9	4.2
Government Pension Fund (GPF) assets
	(in percent of mainland GDP)		49.4	66.4	74.6	96.1	114.1	133.6	151.0	168.7	185.2
Oil price assumption (in Norwegian krone)			197.9	204.4	254.1	343.5	411.8	384.1	416.2	422.3	427.8

Sources: Ministry of Finance; and IMF staff estimates.

Central Government Fiscal Position Under Different Oil Prices, 2002-10

(In percent of mainland GDP; unless otherwise specified)

								Projections
									Based on the 4-percent rule
			2002	2003	2004	2005	2006	2007	2008	2009	2010
			Based on the 2007 revised National Budget projections
Structural non-oil balance			-3.2	-3.6	-3.5	-3.6	-3.6	-4.2	-5.2	-5.7	-6.2
4 percent of GPF assets			-2.0	-1.9	-2.5	-2.8	-3.6	-4.4	-5.2	-5.7	-6.2
Non-oil expenditures			46.4	45.1	44.5	43.5	42.4	43.2	44.3	45.8	46.5
	Increase in real terms
		(applying mainland GDP deflator)	13.0	-1.5	3.1	2.0	2.0	3.8	5.4	5.4	3.7
Government Pension Fund (GPF) assets
	(in percent of mainland GDP)		49.4	66.4	74.6	96.1	114.1	134.2	146.9	160.1	…
Oil price assumption (in Norwegian krone)			197.9	204.4	254.1	343.5	411.8	370.0	358.0	334.6	323.0
			Higher oil price scenario (20 percent more than in the revised 2007 budget projections)
Structural non-oil balance			-3.2	-6	-3.5	-6	-6	-4.2	-5.3	-6.0	-6.6
4 percent of GPF assets			-2.0	-1.9	-2.5	-2.8	-3.6	-4.4	-5.3	-6.0	-6.6
Non-oil expenditures			46.4	45.1	44.5	43.5	42.4	43.2	44.5	46.0	46.9
	Increase in real terms
		(applying mainland GDP deflator)	13.0	-1.5	3.1	2.0	2.0	3.8	5.7	5.6	3.9
Government Pension Fund (GPF) assets
	(in percent of mainland GDP)		49.4	66.4	74.6	14.11	114.1	138.0	153.8	169.9	…
Oil price assumption (in Norwegian krone)			197.9	204.4	254.1	343.5	411.8	444.0	429.6	401.5	387.6
			Based on WEO projections
Structural non-oil balance (WEO)			-3.2	-3.6	-3.5	-3.6	-3.6	-4.2	-5.0	-5.8	-6.5
4 percent of GPF assets			-2.0	-1.9	-2.5	-2.8	-3.6	-4.4	-5.0	-5.8	-6.5
Non-oil expenditures			46.4	45.1	44.5	43.5	42.4	43.2	44.2	45.8	46.8
	Increase in real terms
		(applying mainland GDP deflator)	13.0	-1.5	3.1	2.0	2.0	3.8	5.1	5.9	4.2
Government Pension Fund (GPF) assets
	(in percent of mainland GDP)		49.4	66.4	74.6	96.1	114.1	133.6	151.0	168.7	185.2
Oil price assumption (in Norwegian krone)			197.9	204.4	254.1	343.5	411.8	384.1	416.2	422.3	427.8

Sources: Ministry of Finance; and IMF staff estimates.

Table 1.

Norway: Selected Economic Indicators, 2002-08

Sources: Ministry of Finance; Norges Bank; Statistics Norway; International Financial Statistics; and IMF staff estimates.

^{^1/}IMF staff projections as of March 2007. Fiscal projections are based on the revised 2007 budget, published on May 15,2007.

^{^2/}Excludes items related to petroleum exploitation and ocean shipping.

^{^3/}Budget definition.

^{^4/}National accounts definition.

Table 1.

Norway: Selected Economic Indicators, 2002-08

								Proj. ^1/
			2002	2003	2004	2005	2006	2007	2008
Real economy (change in percent)
Private consumption			3.1	2.8	5.6	3.3	4.3	4.0	3.2
Public consumption			3.1	1.7	1.5	1.8	2.2	2.8	3.0
Gross fixed investment			-1.1	0.2	10.2	11.2	8.9	5.7	3.3
Export of goods and services			-0.3	-0.2	1.1	0.7	1.5	2.4	4.9
	of which: Oil and gas		2.4	-0.6	-0.5	-5.0	-5.4	-1.3	7.3
Import of goods and services			1.0	1.4	8.8	8.6	9.1	5.5	3.8
GDP			1.5	1.0	3.9	2.7	2.9	2.8	3.6
Mainland GDP ^2/			1.4	1.3	4.4	4.5	4.6	3.8	2.7
Consumer prices			1.3	2.5	0.4	1.6	2.3	0.8	2.5
Wages (full-time equivalents)			5.7	4.5	3.8	3.3	4.3	…	…
Unemployment (percent of labor force)			3.9	4.5	4.5	4.6	3.4	2.8	2.9
Money and credit (end-period, 12-month percent change)
Broad money, M2			8.6	2.3	7.8	11.3	13.3	…	…
Domestic credit			8.9	6.8	8.9	13.1	14.6	…	…
Interest rates (year average, in percent)
Three-month interbank rate			6.9	4.1	2.0	2.2	3.0	…	…
Ten-year government bond yield			6.4	5.0	4.4	3.7	4.1	…	…
Public finance (percent of mainland GDP)
Central government ^3/
	Revenues		56.4	54.9	55.1	59.5	63.7	60.9	64.1
		of which: Non-oil revenues	41.3	39.9	38.7	39.0	39.6	40.8	40.8
	Expenditures		47.7	46.5	45.9	45.0	43.7	44.5	44.6
	Overall balance		8.7	8.4	9.2	14.6	19.9	16.3	19.5
		of which: Non-oil balance	-5.1	-5.2	-5.8	-4.5	-2.8	-2.4	-3.2
General government financial balance ^4/			11.5	9.1	14.3	20.4	25.0	20.9	24.1
	of which: Non-oil balance		-3.8	-6.7	-4.7	-3.1	-2.0	-1.9	-2.7
Balance of payments (percent of mainland GDP)
Current account balance			15.7	15.4	16.4	20.8	23.0	18.9	21.5
	of which: Non-oil balance		-6.5	-6.5	-8.4	-8.5	-8.7	-9.4	-9.5
Trade balance (goods and services)			16.7	16.2	17.4	22.1	24.5	20.0	22.6
Net exports of oil and gas			22.2	21.9	24.8	29.3	31.6	28.3	31.0
Exchange rates (percent change)
Nominal effective exchange rate			9.0	-1.8	-2.4	4.2	-0.3	…	…
Real effective exchange rate			8.5	-1.2	-3.6	3.9	0.2	…	…
Memorandum item:
Nominal GDP (billions of NKr)			1,532	1,594	1,743	1,743	2,148	2,170	2,338
Nominal mainland GDP (billions of NKr)			1,225	1,275	1,355	1,446	1,563	1,609	1,705

Sources: Ministry of Finance; Norges Bank; Statistics Norway; International Financial Statistics; and IMF staff estimates.

^{^1/}IMF staff projections as of March 2007. Fiscal projections are based on the revised 2007 budget, published on May 15,2007.

^{^2/}Excludes items related to petroleum exploitation and ocean shipping.

^{^3/}Budget definition.

^{^4/}National accounts definition.

Table 1.

Norway: Selected Economic Indicators, 2002-08

								Proj. ^1/
			2002	2003	2004	2005	2006	2007	2008
Real economy (change in percent)
Private consumption			3.1	2.8	5.6	3.3	4.3	4.0	3.2
Public consumption			3.1	1.7	1.5	1.8	2.2	2.8	3.0
Gross fixed investment			-1.1	0.2	10.2	11.2	8.9	5.7	3.3
Export of goods and services			-0.3	-0.2	1.1	0.7	1.5	2.4	4.9
	of which: Oil and gas		2.4	-0.6	-0.5	-5.0	-5.4	-1.3	7.3
Import of goods and services			1.0	1.4	8.8	8.6	9.1	5.5	3.8
GDP			1.5	1.0	3.9	2.7	2.9	2.8	3.6
Mainland GDP ^2/			1.4	1.3	4.4	4.5	4.6	3.8	2.7
Consumer prices			1.3	2.5	0.4	1.6	2.3	0.8	2.5
Wages (full-time equivalents)			5.7	4.5	3.8	3.3	4.3	…	…
Unemployment (percent of labor force)			3.9	4.5	4.5	4.6	3.4	2.8	2.9
Money and credit (end-period, 12-month percent change)
Broad money, M2			8.6	2.3	7.8	11.3	13.3	…	…
Domestic credit			8.9	6.8	8.9	13.1	14.6	…	…
Interest rates (year average, in percent)
Three-month interbank rate			6.9	4.1	2.0	2.2	3.0	…	…
Ten-year government bond yield			6.4	5.0	4.4	3.7	4.1	…	…
Public finance (percent of mainland GDP)
Central government ^3/
	Revenues		56.4	54.9	55.1	59.5	63.7	60.9	64.1
		of which: Non-oil revenues	41.3	39.9	38.7	39.0	39.6	40.8	40.8
	Expenditures		47.7	46.5	45.9	45.0	43.7	44.5	44.6
	Overall balance		8.7	8.4	9.2	14.6	19.9	16.3	19.5
		of which: Non-oil balance	-5.1	-5.2	-5.8	-4.5	-2.8	-2.4	-3.2
General government financial balance ^4/			11.5	9.1	14.3	20.4	25.0	20.9	24.1
	of which: Non-oil balance		-3.8	-6.7	-4.7	-3.1	-2.0	-1.9	-2.7
Balance of payments (percent of mainland GDP)
Current account balance			15.7	15.4	16.4	20.8	23.0	18.9	21.5
	of which: Non-oil balance		-6.5	-6.5	-8.4	-8.5	-8.7	-9.4	-9.5
Trade balance (goods and services)			16.7	16.2	17.4	22.1	24.5	20.0	22.6
Net exports of oil and gas			22.2	21.9	24.8	29.3	31.6	28.3	31.0
Exchange rates (percent change)
Nominal effective exchange rate			9.0	-1.8	-2.4	4.2	-0.3	…	…
Real effective exchange rate			8.5	-1.2	-3.6	3.9	0.2	…	…
Memorandum item:
Nominal GDP (billions of NKr)			1,532	1,594	1,743	1,743	2,148	2,170	2,338
Nominal mainland GDP (billions of NKr)			1,225	1,275	1,355	1,446	1,563	1,609	1,705

Sources: Ministry of Finance; Norges Bank; Statistics Norway; International Financial Statistics; and IMF staff estimates.

^{^1/}IMF staff projections as of March 2007. Fiscal projections are based on the revised 2007 budget, published on May 15,2007.

^{^2/}Excludes items related to petroleum exploitation and ocean shipping.

^{^3/}Budget definition.

^{^4/}National accounts definition.

Table 8.

Norway: Fiscal and Monetary Indicators, 2002-07

(Percent of GDP, unless otherwise indicated)

Sources: Ministry of Finance; Norges Bank; and IMF staff estimates.

^¹/Budget definition. Ministry of Finance. Fiscal projections are based on the revised 2007 budget, published on May 15, 2007.

^²/Includes exceptional transactions with local government and accounting discrepancies.

^³/Includes cyclical adjustments for transfers from Norges Bank and net interest income.

^⁴/National accounts definition. Ministry of Finance. Fiscal projections are based on the revised 2007 budget, published on October 6, 2006.

^⁵/Percent of trend mainland GDP (estimated by Fund staff). Adjusted for cyclical effects (central government), estimated by Ministry of Finance.

^⁶/End-period, percent change, national definition.

^⁷/Period average, percent.

Table 8.

Norway: Fiscal and Monetary Indicators, 2002-07

(Percent of GDP, unless otherwise indicated)

									Proj.
				2002	2003	2004	2005	2006	2007
Central Government ^1/
	Revenue			56.4	54.9	55.1	59.5	63.7	60.9
		of which: oil revenue		15.1	15.0	16.4	20.5	24.1	20.1
	Expenditure			47.7	46.5	45.9	45.0	43.7	44.5
	Balance			8.7	8.4	9.2	14.6	19.9	16.3
		of which: non-oil balance		-5.1	-5.2	-5.8	-4.5	-2.8	-2.4
		less adjustments:
			Extraordinary items ^2/	-1.8	-0.1	0.0	0.0	0.1	0.0
			Cyclical correction ^3/	-0.2	-1.5	-2.3	-0.9	0.6	1.8
	Structural non-oil balance			-3.2	-3.6	-3.5	-3.6	-3.6	-4.2
		In percent of trend GDP		-3.1	-3.5	-3.5	-3.6	-3.6	-4.3
General Government ^4/
	Revenue			66.6	66.0	69.2	73.6	77.5	74.7
		of which: oil revenue		15.5	15.9	19.1	23.6	27.1	22.8
	Expenditure			55.0	56.8	54.8	53.1	52.5	53.8
	Balance			11.5	9.1	14.3	20.4	25.0	20.9
		of which: non-oil balance		-3.8	-6.7	-4.7	-3.1	-2.0	-1.9
	Cyclically adjusted non-oil balance ^5/			-3.7	-5.2	-2.5	-2.2	-2.7	-3.8
	Net assets			88.4	102.7	111.3	134.4	149.3	169.8
Monetary Indicators:
	M2 ^6/			8.6	2.3	7.8	11.3	13.3	…
	Domestic credit ^6/			8.9	6.8	8.9	13.1	14.6	…
	Three-month interbank rate ^7/			6.9	4.1	2.0	2.2	3.0	…
	Ten-year government bond yield ^7/			6.4	5.0	4.4	3.7	4.1	…

Sources: Ministry of Finance; Norges Bank; and IMF staff estimates.

^¹/Budget definition. Ministry of Finance. Fiscal projections are based on the revised 2007 budget, published on May 15, 2007.

^²/Includes exceptional transactions with local government and accounting discrepancies.

^³/Includes cyclical adjustments for transfers from Norges Bank and net interest income.

^⁴/National accounts definition. Ministry of Finance. Fiscal projections are based on the revised 2007 budget, published on October 6, 2006.

^⁵/Percent of trend mainland GDP (estimated by Fund staff). Adjusted for cyclical effects (central government), estimated by Ministry of Finance.

^⁶/End-period, percent change, national definition.

^⁷/Period average, percent.

Table 8.

Norway: Fiscal and Monetary Indicators, 2002-07

(Percent of GDP, unless otherwise indicated)

									Proj.
				2002	2003	2004	2005	2006	2007
Central Government ^1/
	Revenue			56.4	54.9	55.1	59.5	63.7	60.9
		of which: oil revenue		15.1	15.0	16.4	20.5	24.1	20.1
	Expenditure			47.7	46.5	45.9	45.0	43.7	44.5
	Balance			8.7	8.4	9.2	14.6	19.9	16.3
		of which: non-oil balance		-5.1	-5.2	-5.8	-4.5	-2.8	-2.4
		less adjustments:
			Extraordinary items ^2/	-1.8	-0.1	0.0	0.0	0.1	0.0
			Cyclical correction ^3/	-0.2	-1.5	-2.3	-0.9	0.6	1.8
	Structural non-oil balance			-3.2	-3.6	-3.5	-3.6	-3.6	-4.2
		In percent of trend GDP		-3.1	-3.5	-3.5	-3.6	-3.6	-4.3
General Government ^4/
	Revenue			66.6	66.0	69.2	73.6	77.5	74.7
		of which: oil revenue		15.5	15.9	19.1	23.6	27.1	22.8
	Expenditure			55.0	56.8	54.8	53.1	52.5	53.8
	Balance			11.5	9.1	14.3	20.4	25.0	20.9
		of which: non-oil balance		-3.8	-6.7	-4.7	-3.1	-2.0	-1.9
	Cyclically adjusted non-oil balance ^5/			-3.7	-5.2	-2.5	-2.2	-2.7	-3.8
	Net assets			88.4	102.7	111.3	134.4	149.3	169.8
Monetary Indicators:
	M2 ^6/			8.6	2.3	7.8	11.3	13.3	…
	Domestic credit ^6/			8.9	6.8	8.9	13.1	14.6	…
	Three-month interbank rate ^7/			6.9	4.1	2.0	2.2	3.0	…
	Ten-year government bond yield ^7/			6.4	5.0	4.4	3.7	4.1	…

Sources: Ministry of Finance; Norges Bank; and IMF staff estimates.

^¹/Budget definition. Ministry of Finance. Fiscal projections are based on the revised 2007 budget, published on May 15, 2007.

^²/Includes exceptional transactions with local government and accounting discrepancies.

^³/Includes cyclical adjustments for transfers from Norges Bank and net interest income.

^⁴/National accounts definition. Ministry of Finance. Fiscal projections are based on the revised 2007 budget, published on October 6, 2006.

^⁵/Percent of trend mainland GDP (estimated by Fund staff). Adjusted for cyclical effects (central government), estimated by Ministry of Finance.

^⁶/End-period, percent change, national definition.

^⁷/Period average, percent.

Table 9.

Norway: General Government Financial Accounts, 2002-07

Sources: Ministry of Finance; and IMF staff estimates.

^¹/Fiscal projections are based on the revised 2007 budget, published on May 15, 2007.

^²/Because of transfers between government sectors, the sum of oil revenue (expenditure) and non-oil revenue (expenditure) is not necessarily equal to total revenue.

^³/Includes the return on the Government Pension Fund (GPF).

^⁴/Excludes the return on the GPF.

^⁵/Percent of trend mainland GDP. Adjusted for cyclical effects. IMF staff estimates and projections.

^⁶/IMF staff estimates and projections.

Table 9.

Norway: General Government Financial Accounts, 2002-07

									Proj. ^1/
				2002	2003	2004	2005	2006	2007
				(Billions of NKr)
Total revenue ^2/				815.1	840.9	937.3	1,063.8	1,211.9	1,202.0
	Oil revenue			166.7	177.0	225.7	304.5	368.4	295.0
	Non-oil revenue			649.6	666.4	713.2	760.9	845.2	908.1
		Financial income ^3/		75.1	80.2	84.7	90.8	118.4	142.0
			Of which, return on the GPF	22.6	25.8	33.3	36.9	55.7	72.3
		Tax revenue		563.7	571.5	617.1	658.6	714.5	753.7
		Transfers		9.6	13.2	9.8	9.7	10.2	10.3
		Capital revenue		1.2	1.5	1.7	1.8	2.1	2.1
Total expenditure ^2/				674.0	724.7	743.2	768.2	821.1	866.4
	Oil expenditure			1.3	1.3	1.2	0.7	1.2	1.1
	Non-oil expenditure			673.9	725.9	743.5	769.1	821.5	866.4
		Financial expenditure		27.7	28.8	24.6	23.5	32.8	26.9
		Consumption		339.4	358.7	373.3	390.0	417.8	443.7
		Transfers		291.0	318.5	327.0	337.6	348.2	369.6
		Capital expenditure		15.8	19.8	18.7	18.0	22.7	26.1
Overall balance				141.1	116.2	194.1	295.6	390.9	335.6
Non-oil balance ^4/				-46.8	-85.2	-63.6	-45.1	-32.0	-30.6
Cyclically adjusted non-oil balance ^4/^5/				-41.4	-68.4	-53.7	-43.6	-43.0	-48.8
Cyclically adjusted non-oil primary balance ^4/^5/				-66.2	-94.1	-80.6	-74.1	-72.9	-91.6
				(Percent of GDP)
Total revenue ^2/				66.6	66.0	69.2	73.6	77.5	74.7
	Oil revenue			13.6	13.9	16.7	21.1	23.6	18.3
	Non-oil revenue			53.0	52.3	52.6	52.6	54.1	56.4
		Financial income ^3/		6.1	6.3	6.2	6.3	7.6	8.8
		Tax revenue		46.0	44.8	45.5	45.5	45.7	46.8
		Transfers		0.8	1.0	0.7	0.7	0.7	0.6
		Capital revenue		0.1	0.1	0.1	0.1	0.1	0.1
Total expenditure ^2/				55.0	56.8	54.8	53.1	52.5	53.8
	Non-oil expenditure			55.0	56.9	54.9	53.2	52.6	53.8
		Financial expenditure		2.3	2.3	1.8	1.6	2.1	1.7
		Consumption		27.7	28.1	27.5	27.0	26.7	27.6
		Transfers		23.8	25.0	24.1	23.3	22.3	23.0
		Capital expenditure		1.3	1.6	1.4	1.2	1.5	1.6
Overall balance				11.5	9.1	14.3	20.4	25.0	20.9
Non-oil balance ^4/				-3.8	-6.7	-4.7	-3.1	-2.0	-1.9
Cyclically adjusted non-oil balance ^4/^5/				-3.3	-5.2	-3.9	-3.0	-2.8	-3.1
Cyclically adjusted non-oil primary balance ^4/^5/				-5.4	-7.2	-5.9	-5.1	-4.7	-5.8
Memorandum items:
	Net public assets
		Billions of NKr		1,082.8	1,309.3	1,508.6	1,943.0	2,333.9	2,669.5
		Percent of GDP		88.4	102.7	111.3	134.4	149.3	165.9
	Nominal GDP (billions of NKr) ^6/			1,224.6	1,274.8	1,355.3	1,446.0	1,563.1	1,608.9
	Trend nominal GDP (billions of NKr) ^6/			1,236.3	1,310.0	1,375.1	1,447.5	1,541.3	1,573.6
	Output gap ^6/			-0.9	-2.7	-1.4	-0.1	1.4	2.2

Sources: Ministry of Finance; and IMF staff estimates.

^¹/Fiscal projections are based on the revised 2007 budget, published on May 15, 2007.

^²/Because of transfers between government sectors, the sum of oil revenue (expenditure) and non-oil revenue (expenditure) is not necessarily equal to total revenue.

^³/Includes the return on the Government Pension Fund (GPF).

^⁴/Excludes the return on the GPF.

^⁵/Percent of trend mainland GDP. Adjusted for cyclical effects. IMF staff estimates and projections.

^⁶/IMF staff estimates and projections.

Table 9.

Norway: General Government Financial Accounts, 2002-07

									Proj. ^1/
				2002	2003	2004	2005	2006	2007
				(Billions of NKr)
Total revenue ^2/				815.1	840.9	937.3	1,063.8	1,211.9	1,202.0
	Oil revenue			166.7	177.0	225.7	304.5	368.4	295.0
	Non-oil revenue			649.6	666.4	713.2	760.9	845.2	908.1
		Financial income ^3/		75.1	80.2	84.7	90.8	118.4	142.0
			Of which, return on the GPF	22.6	25.8	33.3	36.9	55.7	72.3
		Tax revenue		563.7	571.5	617.1	658.6	714.5	753.7
		Transfers		9.6	13.2	9.8	9.7	10.2	10.3
		Capital revenue		1.2	1.5	1.7	1.8	2.1	2.1
Total expenditure ^2/				674.0	724.7	743.2	768.2	821.1	866.4
	Oil expenditure			1.3	1.3	1.2	0.7	1.2	1.1
	Non-oil expenditure			673.9	725.9	743.5	769.1	821.5	866.4
		Financial expenditure		27.7	28.8	24.6	23.5	32.8	26.9
		Consumption		339.4	358.7	373.3	390.0	417.8	443.7
		Transfers		291.0	318.5	327.0	337.6	348.2	369.6
		Capital expenditure		15.8	19.8	18.7	18.0	22.7	26.1
Overall balance				141.1	116.2	194.1	295.6	390.9	335.6
Non-oil balance ^4/				-46.8	-85.2	-63.6	-45.1	-32.0	-30.6
Cyclically adjusted non-oil balance ^4/^5/				-41.4	-68.4	-53.7	-43.6	-43.0	-48.8
Cyclically adjusted non-oil primary balance ^4/^5/				-66.2	-94.1	-80.6	-74.1	-72.9	-91.6
				(Percent of GDP)
Total revenue ^2/				66.6	66.0	69.2	73.6	77.5	74.7
	Oil revenue			13.6	13.9	16.7	21.1	23.6	18.3
	Non-oil revenue			53.0	52.3	52.6	52.6	54.1	56.4
		Financial income ^3/		6.1	6.3	6.2	6.3	7.6	8.8
		Tax revenue		46.0	44.8	45.5	45.5	45.7	46.8
		Transfers		0.8	1.0	0.7	0.7	0.7	0.6
		Capital revenue		0.1	0.1	0.1	0.1	0.1	0.1
Total expenditure ^2/				55.0	56.8	54.8	53.1	52.5	53.8
	Non-oil expenditure			55.0	56.9	54.9	53.2	52.6	53.8
		Financial expenditure		2.3	2.3	1.8	1.6	2.1	1.7
		Consumption		27.7	28.1	27.5	27.0	26.7	27.6
		Transfers		23.8	25.0	24.1	23.3	22.3	23.0
		Capital expenditure		1.3	1.6	1.4	1.2	1.5	1.6
Overall balance				11.5	9.1	14.3	20.4	25.0	20.9
Non-oil balance ^4/				-3.8	-6.7	-4.7	-3.1	-2.0	-1.9
Cyclically adjusted non-oil balance ^4/^5/				-3.3	-5.2	-3.9	-3.0	-2.8	-3.1
Cyclically adjusted non-oil primary balance ^4/^5/				-5.4	-7.2	-5.9	-5.1	-4.7	-5.8
Memorandum items:
	Net public assets
		Billions of NKr		1,082.8	1,309.3	1,508.6	1,943.0	2,333.9	2,669.5
		Percent of GDP		88.4	102.7	111.3	134.4	149.3	165.9
	Nominal GDP (billions of NKr) ^6/			1,224.6	1,274.8	1,355.3	1,446.0	1,563.1	1,608.9
	Trend nominal GDP (billions of NKr) ^6/			1,236.3	1,310.0	1,375.1	1,447.5	1,541.3	1,573.6
	Output gap ^6/			-0.9	-2.7	-1.4	-0.1	1.4	2.2

Sources: Ministry of Finance; and IMF staff estimates.

^¹/Fiscal projections are based on the revised 2007 budget, published on May 15, 2007.

^²/Because of transfers between government sectors, the sum of oil revenue (expenditure) and non-oil revenue (expenditure) is not necessarily equal to total revenue.

^³/Includes the return on the Government Pension Fund (GPF).

^⁴/Excludes the return on the GPF.

^⁵/Percent of trend mainland GDP. Adjusted for cyclical effects. IMF staff estimates and projections.

^⁶/IMF staff estimates and projections.

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Norway: 2007 Article IV Consultation: Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Norway

Author: International Monetary Fund

Volume/Issue:: Volume 2007: Issue 196

Publisher:: International Monetary Fund

ISBN:: 9781451829808

ISSN:: 1934-7685

Pages:: 60

DOI:: https://doi.org/10.5089/9781451829808.002

Keywords

Table 9.

Norway: General Government Financial Accounts, 2002-07

									Proj. ^1/
				2002	2003	2004	2005	2006	2007
				(Billions of NKr)
Total revenue ^2/				815.1	840.9	937.3	1,063.8	1,211.9	1,202.0
	Oil revenue			166.7	177.0	225.7	304.5	368.4	295.0
	Non-oil revenue			649.6	666.4	713.2	760.9	845.2	908.1
		Financial income ^3/		75.1	80.2	84.7	90.8	118.4	142.0
			Of which, return on the GPF	22.6	25.8	33.3	36.9	55.7	72.3
		Tax revenue		563.7	571.5	617.1	658.6	714.5	753.7
		Transfers		9.6	13.2	9.8	9.7	10.2	10.3
		Capital revenue		1.2	1.5	1.7	1.8	2.1	2.1
Total expenditure ^2/				674.0	724.7	743.2	768.2	821.1	866.4
	Oil expenditure			1.3	1.3	1.2	0.7	1.2	1.1
	Non-oil expenditure			673.9	725.9	743.5	769.1	821.5	866.4
		Financial expenditure		27.7	28.8	24.6	23.5	32.8	26.9
		Consumption		339.4	358.7	373.3	390.0	417.8	443.7
		Transfers		291.0	318.5	327.0	337.6	348.2	369.6
		Capital expenditure		15.8	19.8	18.7	18.0	22.7	26.1
Overall balance				141.1	116.2	194.1	295.6	390.9	335.6
Non-oil balance ^4/				-46.8	-85.2	-63.6	-45.1	-32.0	-30.6
Cyclically adjusted non-oil balance ^4/^5/				-41.4	-68.4	-53.7	-43.6	-43.0	-48.8
Cyclically adjusted non-oil primary balance ^4/^5/				-66.2	-94.1	-80.6	-74.1	-72.9	-91.6
				(Percent of GDP)
Total revenue ^2/				66.6	66.0	69.2	73.6	77.5	74.7
	Oil revenue			13.6	13.9	16.7	21.1	23.6	18.3
	Non-oil revenue			53.0	52.3	52.6	52.6	54.1	56.4
		Financial income ^3/		6.1	6.3	6.2	6.3	7.6	8.8
		Tax revenue		46.0	44.8	45.5	45.5	45.7	46.8
		Transfers		0.8	1.0	0.7	0.7	0.7	0.6
		Capital revenue		0.1	0.1	0.1	0.1	0.1	0.1
Total expenditure ^2/				55.0	56.8	54.8	53.1	52.5	53.8
	Non-oil expenditure			55.0	56.9	54.9	53.2	52.6	53.8
		Financial expenditure		2.3	2.3	1.8	1.6	2.1	1.7
		Consumption		27.7	28.1	27.5	27.0	26.7	27.6
		Transfers		23.8	25.0	24.1	23.3	22.3	23.0
		Capital expenditure		1.3	1.6	1.4	1.2	1.5	1.6
Overall balance				11.5	9.1	14.3	20.4	25.0	20.9
Non-oil balance ^4/				-3.8	-6.7	-4.7	-3.1	-2.0	-1.9
Cyclically adjusted non-oil balance ^4/^5/				-3.3	-5.2	-3.9	-3.0	-2.8	-3.1
Cyclically adjusted non-oil primary balance ^4/^5/				-5.4	-7.2	-5.9	-5.1	-4.7	-5.8
Memorandum items:
	Net public assets
		Billions of NKr		1,082.8	1,309.3	1,508.6	1,943.0	2,333.9	2,669.5
		Percent of GDP		88.4	102.7	111.3	134.4	149.3	165.9
	Nominal GDP (billions of NKr) ^6/			1,224.6	1,274.8	1,355.3	1,446.0	1,563.1	1,608.9
	Trend nominal GDP (billions of NKr) ^6/			1,236.3	1,310.0	1,375.1	1,447.5	1,541.3	1,573.6
	Output gap ^6/			-0.9	-2.7	-1.4	-0.1	1.4	2.2

Sources: Ministry of Finance; and IMF staff estimates.

^¹/Fiscal projections are based on the revised 2007 budget, published on May 15, 2007.

^²/Because of transfers between government sectors, the sum of oil revenue (expenditure) and non-oil revenue (expenditure) is not necessarily equal to total revenue.

^³/Includes the return on the Government Pension Fund (GPF).

^⁴/Excludes the return on the GPF.

^⁵/Percent of trend mainland GDP. Adjusted for cyclical effects. IMF staff estimates and projections.

^⁶/IMF staff estimates and projections.

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