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Norway - Overview

Contents extracted from the comprehensive atlas of international trade by Export Entreprises

Introduction

Capital:: Oslo
Area:: 324 km2
Total Population:: 5.019
Annual growth rate:: 1.00%
Density:: 16.00/km2
Urban population:: 80%
Population of Oslo (876), Bergen (250), Trondheim (165), Stravanger (120), Baerum (110)
Official language: Nearly all Norwegians speak the official language, Norwegian. It has two written forms, Bokmål and Nynorsk. Bokmål is more common of the two. In some districts Sami (spoken by the Sami minority) is also an official language.
Other languages spoken: Official language : Norwegian
Business languages: Norwegian & English.
Business language: Most Norwegians speak at least some English. Business people speak excellent English.
Ethnic Origins:: Norwegian 94,4 % (includes the Sami, about 60000 people), other European 3,6 %, other 2 %
Beliefs: Protestants 87,5%, Pentecostal 1%, Roman Catholic 1%, other Christian 2,4%, Muslim 1,8%, other 8,1%.
Telephone codes:
To make a call from: 0
To make a call to: +47
Internet suffix:: .no
Type of State::
A constitutional monarchy based on parliamentary democracy.
Type of economy::
High-income economy, OECD member
Second GDP per capita in the world; best index of quality of life in the world; economy very dependent on the revenue generated by petroleum exploitation

Economic overview

After more than 15 years of strong growth (annual average of more than 5%), Norway was affected by the global economic recession; however, the drop in production was less severe when compared with other countries. After a slight economic decline in 2009 (-1.6%), growth returned, supported by stimulus measures, household consumption, the dynamic real estate market, and favorable terms of trade.

In 2013, growth slowed down (2%) because of the high business costs and a high level of household debt acting as impediments to growht. For 2014, growth is predicted to reach 2.5%, its main drivers being the budget policy, low interest rates and a strong demand in the oil sector.

Despite being highly dependent on oil prices, the Norwegian economy is very stable with positive prospects. The main challenge for the government is to maintain a stable growth in an adverse international environment while reducing any weaknesses resulting from the tax burden, high levels of household debt, and raised real estate prices.

In 2013, inflation remained stable at around 2.%, the real estate market was more calm and household consumption slowed down. The program of the government emphasizes employment, the environment, and the reform of the education and healthcare system. The 2014 budget, which is still marked by fiscal prudents, was revised at the end of 2013 when the new conservative government came to power. It plans to increase the use of oil revenues to finance various tax relief measures. The government has prioritized infrastructure spending, measures to stimulate competitiveness, growth and production. The country must deal with the question of how to pay for pensions in the future.

Norway is a rich country, with the second highest rate of PNB per capita in the world (55,6000 USD in terms of purchasing power parity). The country also holds first place in the United Nations Development Program’s human development index. Contrary to initial fears, unemployment was maintained during the crisis and has stabilized at a low rate (3.5% of the active population). However, the country has a large number of individuals outside the labour market (around 8%) due to disability or on long-term medical leave.

Main industries

Agriculture contributes to nearly 1.5% of the GDP. Fishing is an important activity, with Norway as one of the biggest exporters of fish in the world. Agricultural subsidies are very significant.

Norway’s economy relies on its natural resources and energy sources (oil, gas, hydraulic energy, forests, and minerals). Oil production dominates the economy, making up nearly one quarter of the GNP. Norway is also a major producer and exporter of natural gas. The political consensus is to save oil and gas revenues for future generations, so that Norway has one of the largest sovereign wealth funds in the world. Shipbuilding, metals, wood pulp and paper, chemical industry, machinery, and electrical equipment make up Norway’s main manufacturing industries. Norway also has one of the largest and most modern fleets in the world.

The service sector is highly developed, it employs three quarters of the population and accounts nearly 60% of GDP.

Foreign trade overview

Norway has a very open economy. Trade represented, on average, more than 70% of GDP during 2009-2011.

Traditionally, the country exports energy-intensive products and imports high-technology items. Its main trade partners are European Union nations. The country is the third largest exporter of oil, the biggest natural gas supplier for Western Europe, and the premier fish supplier in the world. Overall, Norway ranks among the 30 biggest global exporters. Industrial products (ships, oil platforms, etc.) constitute close to 10% of total exports. Norway mainly imports manufactured items (machinery, transporters, information technology), which accounts for 40% of all imports.

Norway’s trade surplus is considerable. The country’s trade balance structurally positive; this trend is expected to continue during the next few years. In January 2014, the trade surplus reached its monthly record level of 5.8b EUR, which was almost 42% more compared to the same period last year, thanks to large oil and gas exports combined with strong exports of goods.

FDI

Norway encourages foreign investment and the investment climate is very positive. After peaking in 2011 (19.9b USD), FDI slowed down in the context of the euro zone crisis. American and Dutch oil companies (Exxon-Mobil, Texaco, Royal Dutch Shell) have made significant investments in Norway. In general, the industries that attract the most FDI are oil, gas, manufacturing, retail, wholesale, and banking. Even though Norway has a narrow domestic market, the country possesses several assets such as its geographical location in a fertile region, its favored ties with the United States, a skilled and multilingual population, a modern economy, and rich energy resources.
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