National Budget 2020: Outline of economic developments and fiscal policy

The Norwegian economy is in its third year of economic expansion. Activity is expanding throughout the country and in most sectors. The strong performance of the Norwegian economy is expected to continue. In the National Budget for 2020, growth in the mainland economy is forecast to reach 2.7 percent this year and 2.5 percent next year. This is above the long-term trend both this year and next.

The labor market continues to improve. The registered unemployment rate has fallen to levels last seen in 2008 and employment growth is strong. About 80 percent of the employment growth has come in the private sector. In the National Budget for 2020, registered unemployment is expected to decline from 2.2 percent this year to 2.1 percent next year.

The fiscal impulse for 2020 is estimated at -0.2 percentage points. Petroleum revenue spending, as measured by the structural non-oil deficit, is estimated at NOK 243.6 billion. This corresponds to 2.6 per cent of the estimated capital in the Government Pension Fund Global at the beginning of 2020.

Table: Selected key figures in the National Budget 2020

 

2018

2019

2020

Real gross domestic product (mainland Norway)1

2.2

2.7

2.5

Employment, persons1

1.6

1.6

1.0

Unemployment rate, LFS (level)

3.8

3.5

3.4

Unemployment rate, registered (level)

2.5

2.2

2.1

Structural, non-oil fiscal deficit, bill. 2020-NOK

226.8

246.2

243.6

Fiscal impulse2

-0.4

0.5

-0.2

Spending of petroleum revenues3

2.5

2.9

2.6

¹Change from previous year in percent

2Structural, non-oil fiscal deficit measured in percent of trend mainland GDP. Change from previous year in percentage points.

3Structural, non-oil budget deficit measured in percent of the capital in the Government Pension Fund Global at the beginning of the year.

Sources: Statistics Norway and Ministry of Finance.