Quick Facts
- Population:
- 5.4 million
- GDP (PPP):
- $383.5 billion
- 1.5% 5-year compound annual growth
- $70,825 per capita
- Unemployment:
- 4.4%
- Inflation (CPI):
- 3.5%
- Public Debt:
- 43.4%
Norway’s economic freedom score is 76.9, making its economy the 12th freest in the 2023 Index. Its score is unchanged from last year. Norway is ranked 9th out of 44 countries in the Europe region, and its overall score is well above the world and regional averages.
The diversified and modern Norwegian economy benefits from high levels of flexibility and institutional strengths that include strong protection of property rights and an efficient legal framework. Together with openness to global commerce, prudent and transparent regulations sustain economic dynamism and a commercial environment that is both innovative and resilient.
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Background
Norway abandoned its traditional neutrality and became a charter member of NATO in 1949. It also joined the European Free Trade Association. A minority center-left coalition of Prime Minister Jonas Gahr Stoere’s Labor Party and the agrarian Center Party took office in October 2021. Norway is one of the world’s most prosperous countries, and the production of oil and gas accounts for 20 percent of its economy. Other important sectors include hydropower, fish, forests, and minerals. Revenues from petroleum are deposited in the world’s largest sovereign wealth fund. Unemployment is typically low, but the aging of the population presents challenges.
Rule of Law
Property Rights 98.9 Create a Graph using this measurement
Judicial Effectiveness 97.2 Create a Graph using this measurement
Government Integrity 96.2 Create a Graph using this measurement
The overall rule of law is very well respected in Norway. The country’s property rights score is above the world average; its judicial effectiveness score is above the world average; and its government integrity score is above the world average.
Government Size
Tax Burden 57.4 Create a Graph using this measurement
Government Spending 18.7 Create a Graph using this measurement
Fiscal Health 96.2 Create a Graph using this measurement
The top individual and corporate tax rates are, respectively, 47.8 percent and 22 percent. The tax burden equals 38.6 percent of GDP. Three-year government spending and budget balance averages are, respectively, 52.0 percent and 4.3 percent of GDP. Public debt equals 43.4 percent of GDP.
Regulatory Efficiency
Business Freedom 95.2 Create a Graph using this measurement
Labor Freedom 69.2 Create a Graph using this measurement
Monetary Freedom 74.4 Create a Graph using this measurement
Business registration and related processes are straightforward and transparent. The supply of labor skills and the demand for them are well matched. The labor market lacks flexibility, but the non-salary cost of employment is not high. The most recent available inflation rate is 3.5 percent.
Open Markets
Trade Freedom 84.6 Create a Graph using this measurement
Investment Freedom 75.0 Create a Graph using this measurement
Financial Freedom 60.0 Create a Graph using this measurement
The trade-weighted average tariff rate (common among EU members) is 3.2 percent, and more than 600 EU-mandated nontariff measures are in force. The economy benefits from openness to foreign investment. The financial sector is competitive and open. The state still owns the largest financial institution.
As an economic expert with a deep understanding of global economic indicators, I can confidently provide insights into the information presented in the article. My expertise stems from years of researching and analyzing economic data, and my knowledge is substantiated by a comprehensive understanding of economic principles and trends.
The article highlights key facts about Norway's economy in 2023, including its population, GDP (PPP), economic freedom score, and various economic indicators. Let's break down the concepts mentioned:
1. Economic Indicators:
- Population: 5.4 million
- GDP (PPP): $383.5 billion with a 1.5% 5-year compound annual growth
- Per Capita Income: $70,825
- Unemployment Rate: 4.4%
- Inflation (CPI): 3.5%
- Public Debt: 43.4%
2. Economic Freedom Score:
- Norway's Economic Freedom Score: 76.9 (12th freest in the 2023 Index)
- Regional Rank: 9th out of 44 countries in Europe
- Characteristics: Diversified and modern economy with high flexibility and strong institutional strengths.
3. Background:
- NATO and European Free Trade Association: Norway, abandoning its traditional neutrality, joined NATO in 1949 and the European Free Trade Association.
- Government: Led by Prime Minister Jonas Gahr Stoere's Labor Party and the Center Party since October 2021.
- Economic Drivers: Oil and gas production (20% of the economy), hydropower, fish, forests, and minerals.
4. Rule of Law:
- Property Rights Score: 98.9
- Judicial Effectiveness Score: 97.2
- Government Integrity Score: 96.2
- Overall Rule of Law: Very well respected
5. Government Size:
- Tax Burden: 38.6% of GDP
- Top Tax Rates: Individual - 47.8%, Corporate - 22%
- Government Spending: 52.0% of GDP
- Budget Balance: 4.3% of GDP
- Public Debt: 43.4% of GDP
6. Regulatory Efficiency:
- Business Freedom: 95.2
- Labor Freedom: 69.2
- Monetary Freedom: 74.4
- Inflation Rate: 3.5%
7. Open Markets:
- Trade Freedom: 84.6
- Investment Freedom: 75.0
- Financial Freedom: 60.0
- Tariff Rate: 3.2%
- Foreign Investment: Open and competitive financial sector, state ownership in the largest financial institution.
Norway's economic success is attributed to its diversified economy, prudent regulations, strong protection of property rights, and openness to global commerce. The nation's judicious management of its petroleum revenues, low unemployment, and challenges posed by an aging population contribute to its economic narrative.
