Key figures in the Revised National Budget 2023

Activity in the Norwegian economy is still high, even though growth is slowing. Output and employment have both been stronger than projected in the National Budget last autumn. Moreover, wage and price growth are substantially higher than expected. Moving forward, we expect capacity utilisation in the Norwegian economy to normalize. Price and cost inflation is projected to decelerate gradually, but without a marked increase in unemployment.

Higher price growth than expected in the National Budget 2023 last autumn has meant that the original budget has become more contractionary than intended at the time. The already announced compensation for the unexpected price and wage growth will ensure stability and predictability in essential welfare services.

The war in Ukraine and its repercussions also require political action. The Nansen Support Programme for Ukraine, refugee-related expenditure and increased aid to developing countries that are severely affected by the war are costly but necessary measures.

Fiscal policy seeks to balance measures aimed at unforeseen events with the need for responsible fiscal management in the short and long term. The government proposes to increase the structural non-oil fiscal deficit by NOK 56 billion compared to the original budget, to NOK 372.6 billion. As a share of GDP for the mainland economy (non-oil GDP), the structural deficit will increase by 0.4 percentage points from 2022 to 2023. Of this, the Nansen Support Programme for Ukraine accounts for 0.3 percentage points and increased aid to developing countries that are severely affected by the war accounts for 0.1 percentage points. The structural non-oil fiscal deficit corresponds to 3.0 per cent of the Government Pension Fund Global (GPFG) at the start of the year. While the original budget was estimated to have an approximately neutral effect on the economy, model calculations indicate that the revised budget will increase GDP for mainland Norway by 0.3-0.4 per cent in 2023.

Table: Selected key figures in the Revised National Budget 2023¹

	2022	2023
Mainland Norway gross domestic product	3.8	1.0
Employment, persons	3.9	0.8
Unemployment rate, registered (level)	1.8	1.8
Structural non-oil fiscal deficit, NOK billion	357.3	372.6
Change in structural non-oil fiscal deficit, percentage of mainland Norway trend GDP (budget indicator)2	-1.0	0.4
Of which:
Nansen Support Programme for Ukraine		0.3
Increased aid to developing countries that have been severely affected by the war		0.1
Structural non-oil fiscal deficit, percentage of the fund capital3	2.7	3.0
Memo:
Estimated contribution of fiscal policy to growth in GDP for mainland Norway4		0.3-0.4

¹ Percentage volume change from previous year unless otherwise stated.

² Percentage point change.  

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

⁴ Based on model calculations, using the macro models KVARTS (0.4 pct.) and NORA (0.3 pct.). The models take into account that different revenues and expenditure items may differ in their impact on economic activity. The assessment is based accrued (primary) figures for the general government, i.e. including the local government in addition to the central government. Corresponding figures in the National Budget was 0.1 pct. in KVARTS and 0.0 pct. in NORA.

Sources: Ministry of Finance and Statistics Norway.