- Current account balance was reduced by 70 percent compared to the third quarter of last year
- The trade balance weakened by 74 percent in the same period
- Norway’s net foreign assets fell with NOK 641 billion, or 4 percent during the 3rd quarter.
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 152 billion in the third quarter of 2023, down from the NOK 576 billion observed in the third quarter of last year. The fall in the surplus on the trade balance was thus 74 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 still remains elevated compared to pre pandemic levels.
In total, Norway exported goods and services worth NOK 565 billion in the third quarter of 2023. This is a reduction of NOK 421 billion compared to the same period the previous year, and a percentage decrease of 43 percent. Goods exports decreased by 51 per cent, while service exports increased by 2 per cent.
Norway imported goods and services worth NOK 413 billion in the third quarter of 2023. Imports thus increased by 1 per cent. Imports of goods fell by 7 per cent, while imports of services increased by 13 per cent compared to the same period the previous year. The rise in service imports is largely due to increased travel.
The weakening of the krone exchange rate contributed to higher import prices. The third quarter saw a slight appreciation of the krone.
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).
Reduced surplus on the balance of income and current transfers
Reduced surplus on the balance of income and current transfers year on year
The interest and current transfers balance showed a surplus of NOK 41 billion in the third quarter of 2023, NOK 4 billion weaker than in the same period in 2022. The surplus on the income and current transfers amounted to 4,3 per cent of Mainland Norway's GDP in the first quarter of 2023.
Interest payments show strong growth on both the expenditure and income side. Norway's interest income was NOK 82 billion in the third quarter, up from NOK 46 billion in the same period last year. Norway's interest expenses were NOK 67 billion, up from NOK 30 billion in the third quarter of 2022. Higher interest rates in Norway and internationally are an important reason for the increase in interest payments.
Development in Norway’s net foreign assets
Norway’s net foreign assets amounted to NOK 14 135 billion at the end of the 3rd quarter of 2023, which was a small reduction from the previous quarter, where the net foreign assets amounted to NOK 14 776 billion.
The development in Norway’s net foreign assets, i.e. net IIP, is illustrated in the figure below. Changes in net IIP is explained by net lending/borrowing and other changes.
The figure shows the development in Norway's net foreign assets, net lending and net other changes.
Loss in the global stock markets
A large part of Norway’s investments abroad is in stocks. Ups and downs in the global stock markets therefor play a significant role in the development in Norway’s net foreign assets. Market losses on stocks, as well as other securities, had a negative effect on the value of the assets this quarter. In addition, the strengthening of the Norwegian krone during the 3rd quarter had a negative effect on the assets through negative exchange rate changes.
Net lending
Net lending amounted to NOK 198 billion at the end of the third quarter of 2023. The Government Pension Fund Global was the main contributor through its investments in debt securities, among others.
In this publication, the period 1st quarter 2021 to 2nd quarter 2023 has been revised. The figures for 2021 are now considered final, while there are preliminary figures for the 1st quarter of 2022 to the 3rd quarter of 2023. Both exports and imports have been revised to some extent throughout the period. For exports, it is the petroleum products that have been revised the most, with export figures that have been adjusted upward by NOK 91 billion for 2021 and NOK 41 billion for 2022. The major revisions are linked to the volatile prices in the market for natural gas. The turnover value of this is difficult to measure in the short term. This is mostly about revisions of price rather than of volume. For the 1st and 2nd quarters of 2023, petroleum exports have also been revised upwards by NOK 16 and 6 billion respectively. Service exports have also been revised up for the entire period with NOK 4 billion for 2021 and NOK 15 billion for 2022. In 2021, international ocean transport contributed a lot to the upward adjustment. For 2022 this was also the case, and ocean transport was adjusted up by around NOK 4 billion, while financial services and business services were adjusted up by NOK 8 billion. For the first two quarters of 2023, export of service was adjusted up by NOK 9 billion with contributions from travel, transport and other services. When it comes to imports, there was a difference between goods and services. While the import value of goods has been revised downward a lot for both 2021 and 2022, the opposite is the case for services where the import of travel and services has been revised upwards. In total, imports have been revised up by NOK 5 billion for 2021 and NOK 26 billion for 2022. For the first two quarters of 2023, imports have been revised up by NOK 11 and 9 billion respectively. There have also been several revisions in expenditure and income to Norway throughout this period. There are mainly a few items that are changed, and these are partly connected. These are dividends on financial capital and reinvested earnings. On net, the revisions are the largest in 2021 with a net downward adjustment of the balance of income and current transfers by NOK 28 billion. Gross, the revisions are the largest in 2022, where income has been revised up by NOK 57 billion, while expenses have been revised up by NOK 52 billion, i.e. a net upward adjustment of the income and current transfers balance by NOK 5 billion. For the first two quarters of 2023, the income and current transfers balance has been revised by NOK 16 billion and NOK -2 billion respectively. It can nevertheless be noted that for all 10 quarters the total revision of the income and current transfers balance is only down by NOK 8 billion. The financial account is revised from the first quarter of 2022 to 2nd quarter of 2023.