MANAGING NORWAY’S OIL WEALTH
GOVERNOR ØYSTEIN OLSEN
KRISTIANSUND, 3 DECEMBER 2015
GDP per capita
2
PPP-adjusted. Index. US=100
0 50 100 150
Greece Norway Italy France UK Germany Denmark Sweden US Switzerland
1971
Sources: OECD and Norges Bank
GDP per capita
3
PPP-adjusted. Index. US=100
0 50 100 150
Greece Italy France UK Denmark Germany Sweden US Switzerland Norway
2014
Source: OECD
A new market for the shipbuilding industry
4
Index. 1982=100.
0 20 40 60 80 100 120 140 160
0 20 40 60 80 100 120 140 160
1975 1978 1981 1984 1987
Shipbuilding Platform construction
Source: Statistics Norway
High wages in the oil industry
5
Wages per full-time equivalent (FTE). In thousands of NOK. 2014
Sources: Statistics Norway and Norges Bank
0 200 400 600 800 1000 1200 General government
Other manufacturing
Shipbuilding and machinery
Technical services
Finance
Oil and gas extraction
Growth in oil investment
6
Oil investment. In billions of 2013 NOK
0 50 100 150 200 250
0 50 100 150 200 250
1978 1982 1986 1990 1994 1998 2002 2006 2010
Source: Statistics Norway
High wage growth
7
Labour costs relative to trading partners. 1995=100
95 100 105 110 115 120 125 130 135 140
95 100 105 110 115 120 125 130 135 140
1995 1998 2001 2004 2007 2010 2013
Domestic currency Common currency
Sources: The Norwegian Technical Calculation Committee for Wage Settlements and Norges Bank
Fall in oil investment
8
Oil investment. In billions of 2013 NOK
0 50 100 150 200 250
0 50 100 150 200 250
1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018
Source: Statistics Norway and Norges Bank
High wage growth
9
Labour costs relative to trading partners. 1995=100
1) Broken lines are projections made in September 2015.
Sources: The Norwegian Technical Calculation Committee for Wage Settlements and Norges Bank
95 100 105 110 115 120 125 130 135 140
95 100 105 110 115 120 125 130 135 140
1995 1998 2001 2004 2007 2010 2013
Domestic currency 1) Common currency 1) December 2015
Key policy rate reduced
December 2014: Key policy rate lowered, path revised down
March 2015: Key policy rate path revised down
June 2015: Key policy rate lowered, path revised down
September 2015: Key policy rate lowered, path revised
down
102,5%
Key policy rate path
0 1 2 3
0 1 2 3
2010 2012 2014 2016 2018
March 2014 projection September 2015 projection
GPFG ‒ change in market value since January 1998
11
At 30 September 2015. In billions of NOK
Sources: Norges Bank
-1 000 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000
-1 000 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000
1998 2002 2006 2010 2014
Return
Krone exchange rate
Inflow (after management costs)
Lower yields
12
Ten-year government bond yields, average of G5 countries
1). Percent
-5 0 5 10
-5 0 5 10
1990 1996 2002 2008 2014
Nominal yield Real yield
1) US, UK, Germany, France and Japan. The real yield is the nominal yield minus the change in the GDP deflator.
Source: IMF
Spending almost level with revenues
13
In billions of NOK
-500 -400 -300 -200 -100 0 100 200 300 400
-500 -400 -300 -200 -100 0 100 200 300 400
2004–2013 2014 2015¹⁾ 2016¹⁾
Non-oil budget deficit
Government net cash flow from petroleum activities
¹⁾ Projections from the National Budget 2016.
Source: Ministry of Finance
Transfers to GPFG at an end
14
In billions of NOK
-50 0 50 100 150 200 250 300 350 400
-50 0 50 100 150 200 250 300 350 400
2004–2013 2014 2015¹⁾ 2016¹⁾
Transfers to GPFG
Dividend, interest and rental income
¹⁾ Based on a cash flow of 3.3 percent of GPFG capital, equivalent to the average for the period 2010‒2014.
Sources: Ministry of Finance and Norges Bank
