In per capita terms, Norway is one of the richest countries in the world and wealth is evenly distributed. The country is richly endowed with resources, and aside from oil and gas, Norway is blessed with an abundance of minerals, forests, fish and hydropower. Although the economy is highly dependent on hydrocarbon production, Norwegians realise that reserves are finite. Oil and gas funded budget surpluses have been saved in the Government Petroleum Fund which has been invested abroad. It is estimated that this fund is now worth more than $250 billion.
Economy
Following a spell at the beginning of the decade, when the economy expanded by less than one per cent, growth has picked up in recent years to between three and five per cent. In 2007, GDP grew by 3.7 per cent, with domestic activity proving to be the key economic driver. Following a strong growth period which had lasted four years the economy began to slow in 2008 as consumption and demand weakened. GDP grew by two per cent. The lack of liquidity in international financial markets and the prospect of a global recession will see the Norwegian economy contract by two per cent in 2009, for the first time in 30 years. However, growth is still expected to outpace that of the euro area and recovery is expected earlier than in most European countries.
Investment Climate
Norway welcomes foreign investment as a matter of policy and generally grants national treatment to foreign investors. Norwegian authorities encourage foreign investment particularly in the key offshore petroleum sector, mainland industry and in less developed regions such as northern Norway. The European Economic Area (EEA) free trade accord, which came into force for Norway in 1995, requires the country to apply principles of national treatment in certain areas where foreign investment was prohibited or restricted in the past.
Opportunities
Norway's economy is dominated by the oil and gas sector, with Norway the world’s fifth largest oil exporter. The UK is a major importer of natural gas from Norway. However there are opportunities for companies in most sectors. High disposable income and sophisticated tastes make Norway an interesting market for UK exporters. Norway is not a member of the EU, but does belong to the European Economic Area and for all practical purposes forms part of the Single Market.
Significant opportunities exist in the following areas:
• Offshore/Energy
• Quality Consumer Goods
• Telecommunications
• Biotechnology
• Medical Equipment
Oil and Gas
Norway is currently the world’s third largest exporter of crude oil – behind Saudi Arabia and Russia. Norway is ranked as the world's tenth largest oil producer. Production is currently averaging around 2.8 million barrels per day.
Norway's emergence as a major oil and gas producer in the mid-1970s transformed the economy. After more than three decades, the petroleum sector is still gaining significance as a key driver for the Norwegian economy. It is the country’s single largest industry. The sector accounts for more than 25 per cent of GDP, with around 75,000 people directly employed in the sector. Indirectly, it is estimated that the petroleum sector contributes about 200,000 jobs throughout Norway.
The Norwegian Petroleum Directorate (NPD) indicates that oil production in Norway is falling as it makes the transition from being a major oil producer to a major gas producer. It is currently the third largest exporter of natural gas – behind Russia and Canada.
UK Trading Relationship
Norway has a population of only 4.7 million but is one of the world's wealthiest nations per capita. Norway is the UK's 18th largest market with exports worth £2.7 billion in 2008. The UK is Norway's largest export market with exports totalling £20.6 billion in 2008.
KEY FACTS
Official Name: Kingdom of Norway
Capital: Oslo
Area: 323,759 sq km
Population: 4.7m (UN, 2008)
Major language: Norwegian
GDP (current): US$388.41bn (World Bank, 2007)
GDP growth: 3.7% (World Bank, 2007)
GNI per capita: US$77,370 (World Bank, 2007)
Inflation (consumer prices): 3.6% (2008 est.)
Labour force: 2.59m (2008 est.)
Unemployment: 2.6% (2008 est.)
Monetary unit: 1 Norwegian krone = 100 ore
Exports to UK: £20,645.7m (HMRC 2008)
Imports from UK: £2,755.1m (HMRC 2008)
Main Industries
Petroleum and gas, food processing,shipbuilding, pulp and paper products,metals, chemicals, timber, mining,textiles, fishing.
Main Exports
Petroleum and petroleum products, machineryand equipment, metals, chemicals, ships, fish.
Main Imports
Machinery and equipment, chemicals,metals, foodstuffs.
CONTACTS
UK Trade & Investment
Kingsgate House
66-74 Victoria Street
London SW1E 6SW
Tel: 020 7215 8000
Email: comsec@online.no
Web: www.uktradeinvest.gov.uk
British Embassy
Thomas Heftyesgate 8
0244 Oslo
Norway
Tel: 00 47 23 13 27 00
Email: comsec@online.no
Web: www.ukinnorway.fco.gov.uk/en
Royal Norwegian Embassy
25 Belgrave Square
London SW1X 8QD
Tel: 020 7591 5500
Email: emb.london@mfa.no
Web: www.norway.org.uk
