The National Budget 2021:

Key Figures in the National Budget 2021

To ensure simultaneous access to potentially market-sensitive macroeconomic data, the Ministry of Finance publishes selected key figures prior to the National Budget and fiscal budget launch at 10:00 a.m. More detailed estimates will be published together with the National Budget.

The coronavirus pandemic has caused the most severe setback in the Norwegian economy since World War II. Activity has been on the rebound in the last few months, but the road ahead remains fraught with uncertainty. Although the upturn has been faster than we envisaged in May, the activity level is likely to remain lower than normal for a long time to come. Mainland GDP growth in 2021 is forecast to be 4.4 percent, after an estimated 3.1 percent reduction this year.

Registered unemployment remains at a high level, although the number of fully unemployed has declined by close to 2/3 since its March peak. Registered unemployment is forecast to decrease from 4.9 percent in 2020 to 3.1 percent in 2021. The employment reduction this year is forecast to be followed by an increase next year; see the table below.

The structural non-oil fiscal deficit is forecast to be NOK 313.4 billion in 2021, which corresponds to 3.0 percent of the estimated value of the Government Pension Fund Global at the beginning of the year. The structural non-oil fiscal deficit is reduced by 2.9 percentage points in 2021, measured in relation to mainland Norway trend GDP (the fiscal impulse). The reduction comes mainly as a result of the phasing out of most of the extensive and temporary extraordinary coronavirus measures in 2020. Adjusted for the coronavirus measures in 2020, the structural non-oil fiscal deficit will increase by about 1 percentage point from 2020 to 2021, measured in relation to mainland Norway trend GDP.

Despite the deficit reduction from 2020 to 2021, the deficit is still about NOK 61 billion higher than in 2019, measured in 2021-prices. All in all, the budgets for 2020 and 2021 have a strong expansionary effect on economic activity in mainland Norway going forward. This reflects that fiscal policy is actively used also next year, for the Norwegian economy to move on from the coronavirus crisis.

Table: Selected key figures in the National Budget 20211

 

2019

2020

2021

Mainland Norway gross domestic product

2.3

-3.1

4.4

Employment, persons

1.6

-1.6

0.6

Unemployment rate, LFS (level)

3.7

4.7

4.4

Unemployment rate, registered (level)

   2.2

4.9

3.1

Structural non-oil fiscal deficit, NOK billion. 2021 prices

252.0

404.3

313.4

Fiscal impulse2

0.4

4.5

-2.9

Fiscal impulse, adjusted for coronavirus measures in 2020

 

 

1.0

Transfer from the GPFG3

2.9

3.9

3.0

¹ Percentage volume change from previous year, unless otherwise stated.

2 Structural non-oil fiscal deficit as a percentage of mainland Norway trend GDP. Change from previous year in percentage points.

3 Structural non-oil fiscal deficit as a percentage of the capital in the Government Pension Fund Global (GPFG) at the beginning of the year. 

Sources: Statistics Norway and the Ministry of Finance.