The National Budget 2023

Key Figures in the National Budget 2023

To ensure simultaneous access to information which may be market sensitive, the Ministry of Finance publishes selected key figures at 8:00AM prior to the budget launch at 10:00 am. More detailed projections will be published with the National Budget.

The Norwegian economy has recovered rapidly following the pandemic. The labour market is now very tight, wage growth appears to be on the rise and inflation has reached its highest levels in decades. Tighter economic policy is now necessary.

In the National Budget the government projects consumer price inflation at 4.8 per cent in 2022 and 2.8 per cent in 2023. Both forecasts are higher than projected in the Revised National Budget from May.

Economic growth appears to be decelerating faster than previously anticipated, both in Norway and abroad. The growth forecast for the non-oil economy (GDP for mainland Norway) is 2.9 per cent in 2022, 1.7 per cent in 2023 and 2.0 per cent in 2024. This is somewhat lower than was projected in the Revised National Budget.

Unemployment is nevertheless expected to remain low. It is likely that employers will continue to experience problems in recruiting within several professions. Registered unemployment is projected to be 1.7 per cent of the labour force in both 2022 and 2023, a decrease from 3.1 per cent in 2021.

Economic policy must now be tightened, to reduce inflationary pressure and to help maintain employment at a high level. The Government therefore proposes to reduce spending from the fund in next year’s budget. Measured by the structural non-oil fiscal deficit, spending from the Government Pension Fund Global will be reduced by NOK 18,3 billion in 2023 compared to 2022, to NOK 316,8 billion. As a share of GDP, the structural non-oil fiscal deficit will be reduced by 0.6 percentage points, implying a negative fiscal impulse.

Spending from the fund, measured by the structural non-oil fiscal deficit, is projected at 2.5 per cent of the value of the fund at the beginning of 2023. A spending substantially below 3 per cent of the fund’s value in a situation with high economic activity is in accordance with the fiscal guideline.

When calculating the structural non-oil fiscal deficit, tax revenues are normally trended. Most expenditure items – including the different electricity support measures – will however have a direct effect on the structural deficit. This implies that government revenues and expenses related to the electricity price will be treated differently when calculating spending from the fund. To ensure better alignment between how the high electricity prices affect the revenue and expenditure side of the structural fiscal balance, the Ministry of Finance has made a temporary adjustment to the calculation of the structural deficit. This is a change from the Revised Budget for 2022. Seen in isolation, the adjustment contributes to reduce the structural deficit with NOK 40.4 billion in 2022 and NOK 34.9 billion in 2023.

Table: Selected key figures in the National Budget 20231

 

2021

2022

2023

2024

Mainland Norway gross domestic product

4.1

2.9

1.7

2.0

Employment, persons

1.2

3.3

0.8

0.3

Unemployment rate, registered (level)

3.1

1.7

1.7

1.9

Structural non-oil fiscal deficit2, 2023 NOK billion

379.7

335.1

316.8

..

Fiscal impulse3

-0.8

-1.2

-0.6

..

Spending from the GPFG4

3.2

2.6

2.5

..

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

2 To ensure better alignment between how the high electricity prices affect the revenue and expenditure side of the structural fiscal balance, the Ministry of Finance has made a temporary adjustment to the calculation of the structural deficit. Seen in isolation, the adjustment contributes to reduce the structural deficit with an estimated NOK 40.4 billion in 2022 and NOK 34.9 billion in 2023.

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

4 Structural non-oil fiscal deficit as a percentage of the capital in the Government Pension Fund Global (GPFG) at the beginning of the year (projections for 2023). 

Sources: Statistics Norway, Norwegian Labour and Welfare Administration and the Ministry of Finance.