Chapter 2

Fiscal Policy

2.2 Estimates for General Government Finances in 2002

Table 4 shows the developments in the general government budget surplus (net lending), using definitions of the national accounts. Net lending corresponds to the surplus concept used in the Maastricht criteria for general government finances. In addition to the Fiscal Budget and the Government Petroleum Fund, this surplus concept comprises other central government and social security accounts, including the National Insurance Fund, the Government Bank Insurance Fund, the Government Bank Investment Fund and other central government funds. The local government sector is also included as a separate administrative level.

Total general government net lending is assumed to decline from NOK 230.1 billion in 2001 to NOK 210.8 billion in 2002. General government net assets, including assets in the Petroleum Fund and capital investment in state enterprises, are estimated at about NOK 1180 billion at the end of 2002, or 78 per cent of GDP.

General government expenditures for Norway is compared with that of EU countries and countries in the OECD area in chart 5. The figures for Norway are based on the estimates in this report. The chart shows that general government expenditures fell from around 52 per cent of total GDP in 1992 to 45.8 per cent of GDP in 1999. General government expenditures as a percentage of mainland GDP was reduced from 61.4 per cent of GDP in 1992 to 53.7 per cent in 1998. As a result of slower growth in the mainland economy in recent years, expenditures as a share of mainland GDP is estimated to increase again to 55.9 per cent in 2002.

Chart 5. Public expenditures

Per cent of GDP

Source: OECD, Statistics Norway and Ministry of Finance.

The general government expenditure level in Norway, measured as a percentage of GDP, has been in line with the average for EU countries in recent years but higher than the average for the OECD area. The relatively low expenditure levels in countries such as the US and Japan contribute to pushing down the average for the OECD area in relation to the average for EU countries. When comparing the level of general government expenditure, it must be taken into account that the countries' debt situation may vary widely. For the EU as a whole, high general government debt means that interest expenses account for a substantial share of general government expenditure.

Table 4. Central and general government net lending. NOK million
 
2000
2001 2)
2002 2)
Fiscal Budget surplus
1525
0 0
+ Surplus in Government Petroleum Fund 162 825 259 486 193 370
+Surplus in other central government and social security accounts -591 3 728 8 230
+ Definitional differences between central government accounts and national accounts 1) 51 354 8 486 2 437
+ Direct investments in state enterprises 4 101 -38 628 -2 570
= Consolidated central government net lending 219 214 233 072 201 467
+ Local government surplus -6 507 -2 972 9 286
= General government net lending 212 707 230 100 210 753
Per cent of GDP 14.9 15.6 14.0

1) Including consolidated and central government accrued, unrecorded taxes.
2) Estimates

Source: Statistics Norway and Ministry of Finance.