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11180
Increase in net financial assets
statistikk
2008-09-26T10:00:00.000Z
Public sector;Public sector
en
offogjeld, General government, financial assets and liabilities, central government, local government, stock, transactions, assets by type (for example bonds, shares, lending), net assets, liabilities by type (for example commercial papers, bonds, loans)Local government finances , General government , Central government finances , Public sector
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General government, financial assets and liabilities, 2007

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Increase in net financial assets

At the end of 2007, general government net financial assets totalled NOK 2615 billion, an increase of NOK 252 billion, or 10.6 per cent compared to 2006. Financial assets increased with 8.0 per cent, while total debt increased by 3.9 per cent.

General gross debt in per cent of GDP, Norway and EU 1997-2007

The growth in general government net financial assets was primarily caused by revenues from extraction of petroleum. The revenues were allocated to the Government Pension Fund - Global. These allocations far surpassed the increase in net financial assets in the general government. The divergence was mainly caused by an appreciation of the Norwegian kroner (NOK) in the currency market, which resulted in total currency losses on foreign investments of NOK 145 billion for 2007. The Government Pension Fund - Global, which constitutes a significant part of other central government and social security accounts, bears the majority of the foreign currency exposure.

In 2007, the Ministry of Finance made the decision to increase the percentage of the Government Pension Fund - Global invested in shares, from 40 to 60 per cent. This is reflected in an increase of other central government and social security accounts assets from foreign investments in shares, participations and primary capital certifications. The increase is principally due to new acquisitions, while a moderate rise in value for the existing share portfolio, measured in foreign currency, was counteracted by the appreciation of the NOK. At the same time, there was a slight decrease in foreign assets comprising of bonds, certificates, commercial papers and treasury bills.

Central government

In 2007, the central government had total financial assets of NOK 752 billion, while total debt summed up to 415 billion. This yielded net financial assets of 337 billion, an increase of NOK 6 billion from the previous year.

Local government

Total net financial debt for the local governments rose to NOK 71.6 billion in 2007, an increase of 10.1 billion from 2006. The increase in net debt was due to a significant deficit in the sector.

General government. Financial balance sheet. Nominal value. NOK billion and change in per cent
  NOK billion Change in
per cent
  2006 2007
A. Financial assets, total 3 837.4       4 145.8 8.0
Cash and deposits  273.6  275.7 0.8
Commercial papers and bonds 1 228.6 1 187.0 -3.4
Other loans 1 011.8 1 097.6 8.5
Capital deposits and shares  999.8 1 240.0 24.0
Other financial assets  323.4  345.1 6.7
       
B. Liabilities, total 1 474.1 1 531.2 3.9
Commercial papers and treasury bills 57.4 49.4 -14.0
Bonds  210.8  207.5 -1.6
Other loans 1 075.5 1 111.0 3.3
Other liabilities  130.4  163.3 25.3
       
C. Net financial assets (A-B) 2 363.2 2 614.6 -
General gross debt 1 186.2 1 184.1 -0.2
Per cent of GDP 54.9 52.0 -

Gross public debt

One of the main criteria of the Maastricht Treaty states that a countries gross public dept should not exceed 60 per cent of its gross domestic product (GDP). Gross public dept, as defined in the Maastricht Treaty, is often used in international comparisons. It includes gross debt from bonds, loans, certificates, commercial papers and treasury bills, measured at face value and consolidated for debt between different units within the general government.

In 2007, gross public dept, according to EU’s definition, totalled NOK 1184 billion, or 52.0 per cent of GDP, a decrease from 54.9 per cent in 2006. The high levels are explained by debt connected to the Government Pension Fund - Global.

Liabilities connected to the Government Pension Fund - Global

Repurchase agreements and re-sale agreements in securities are frequently used instruments in the administration of the Government Pension Fund - Global. The fund sells a portfolio of securities accompanied by a repurchase agreement. In the accounts, the portfolio remains on the asset side of the fund’s balance sheet. The corresponding sales value is entered as a loan from the buyer on the liability side of the balance sheet. The reverse situation is called a re-sale agreement or a reversed repo.

The European System of Accounts (ESA) requires that re-purchase agreements must contain the balance category loan. This means that liabilities associated with repos in the Government Pension Fund - Global are included in the official estimation of Norway’s gross debt. As repurchase agreements inflate both sides of the balance, the gross debt, calculated according to ESA, presents a misleading picture of the financial situation of the general government in Norway.