Financial accounts, Q3 2006

Households’ net lending was NOK -26.6 billion in the 3rd quarter of 2006, compared with NOK -7.4 billion in the same quarter of the previous year.

Net holding gains in the securities market contributed to the increase in the value of households’ financial assets by NOK 18.5 billion in the 3rd quarter of 2006. However the reduction in net lending led to an overall fall in net financial assets of NOK 8.1 billion in the quarter.

Households` net lending over the last four quarters totalled NOK -39.4 billion. This is NOK 19 billion less than in the four quarter period, that lasted from the third quarter of 2005 to the second quarter of 2006. The households’ acquisition of financial assets totalled NOK 138.2 billion in the last four quarter period, while incurrence of debt totalled to NOK 177.6 billion during the period, which is about the same level as in the previous four quarter period. Households’ borrowings from financial enterprises explain the debt growth.

Lower net lending in local government are explained by lower deposits

The net lending of local government over the last four quarters fell from NOK 6.8 billion in the second quarter of 2006 to NOK 4.1 billion in the third quarter of 2006. The net lending of the local government over four quarters has shown a growing trend since the second quarter of 2003, but saw a moderate decrease from the second to the third quarter in 2006. This is partly explained by a fall in transactions in deposits over the last four quarters from NOK 9.3 billion in the second quarter to NOK 7 billion in the third quarter.

During the period from the fourth quarter of 2003 to the third quarter of 2006, local government has redistributed its debt from bonds to loan debt. Total debt at the end of the third quarter is estimated to just below NOK 290 billion.

Net foreign assets experiencing strong growth

Norway’s net foreign assets are calculated to NOK 1 389 billion at the end of the third quarter of 2006, which is an increase of NOK 229 billion during the quarter. The increase can be explained by net lending in the rest of the world of almost NOK 93 billion and net holding gains of NOK 136 billion.

Norwegian financial investments abroad totalled NOK 308 billion, while foreign investments in Norway were NOK 215 billion in the third quarter of 2006. Apart from Norges Bank and the Government Pension Fund, the net lending in the rest of the world was NOK -1.2 billion in the third quarter of 2006. The net lending over the last four quarters to the third quarter of 2006 totalled 17 per cent of the GDP, compared to 15.3 per cent for 2005.