International accounts, Q4 2009

The total annual current account was NOK 333 billion, which is NOK 140 billion below the level in 2008. The main reason for the decline was that the average oil price was lower in 2009 than the year before.

Reduced goods and services balance

The surplus from trade in goods and services sank by NOK 140 billion, and ended at NOK 348 billion in 2009. The decrease was approximately 30 per cent for both goods and services.

The export value of goods was NOK 196 billion in the fourth quarter of 2009. This is a decrease of 17 per cent compared with the fourth quarter of 2008. Overall, goods worth NOK 755 billion were exported in 2009; a decline of NOK 203 billion. In 2009, the prices of crude oil and natural gas were weakened by 25 per cent, while volume fell by 1.3 per cent. The weakened price is therefore the main reason for the decline. The export value of oil and gas production was NOK 157 billion lower in 2009 than the year before.

The import value of goods was also reduced, but not as much as exports. Imports fell by 14 per cent in the fourth quarter and 15 per cent on an annual basis.

The service balance showed a surplus of NOK 9 billion in the fourth quarter and NOK 29 billion for the year overall. This was a decrease of 24 and 29 per cent respectively from 2008. The year’s total service exports went down by 5.7 per cent, while service imports fell by 1.3 per cent. Lower freight income from international shipping explains most of the reduction in the service balance. The export value of the gross carrying was 20 per cent lower in 2009 than in 2008.

Decrease in income and current transfers

Income and current transfers gave a profit of NOK 4 billion in the fourth quarter of 2009, while there was a deficit of NOK 15 billion for the year overall. This is clearly lower compared to the fourth quarter of 2008, while profit for 2009 is about the same as the year before. An increase in net sizes of wages and capital income by NOK 5.5 billion was offset by a fall in net transfers of NOK 6 billion. The main reason for the increased capital income is that the interest expenditure was reduced more than the interest income.

Redistribution of portfolio investment

The Norwegian foreign direct investment abroad in 2009 amounted to NOK 215 billion compared to NOK 166 billion in 2008. Most of the 2009 investment applied to “other capital” (loans etc.).

Portfolio investment abroad was heavily influenced by the redistribution of instruments in the investment of the Government Pension Fund Global. In the 4th quarter of 2009, foreign bonds were reduced by NOK 160 billion through transactions, while there was an increase in foreign equity securities of NOK 17 billion, and loans through repurchase agreements were reduced by NOK 123 billion.

Apart from the reduction of the loans of the Government Pension Fund Global there were less pronounced changes on the liability side of the financial account. However, it is worth noting that the loans of Norges Bank were also heavily reduced partly for the same reason as the loans of the Government Pension Fund Global.

After three quarters with large revaluations due to changes in foreign exchange rates and market prices on securities, the revaluations in the 4th quarter of 2009 were very modest.