Norway

Norway's growth prospects are optimistic, supported by strong economic fundamentals and strategic investments. The nation continues to leverage its abundant natural resources, especially in oil and gas, which remain vital to its economy. Furthermore, Norway is actively working to diversify by investing in renewable energy and technology sectors, aligning with global sustainability objectives. Government initiatives aimed at improving infrastructure and promoting innovation are expected to drive further growth. Although challenges like fluctuating oil prices and global economic uncertainties persist, Norway's resilient economy is well-positioned for ongoing expansion.

After a pickup in 2023, insolvencies have remained stable following very low levels in previous years. They are expected to remain at historical average levels in the coming years, hovering around 4,000 to 4,400 cases. While firms’ profitability remains high, wage growth was above +5% for the second year in a row in 2024, which should push up household purchasing power and thus private consumption. Following subdued growth of +0.7% in 2023, Norwegian growth picked up to +1.5% in 2024 and +1.9% in 2025. Several factors contributed to the upturn. The main reason is stronger household purchasing power and thus higher personal spending. Lower rates strengthened consumption growth. Meanwhile housing construction has stabilized and shows signs of recovery, major infrastructure projects in power and roads are sending clear signals of increased demand in construction, mainland exports remain at good levels despite global uncertainty about tariffs and industry investments have risen since last year. In addition, highly stimulative fiscal policy measures have helped sustain economic activity in recent years and will likely continue driving growth going forward. Norway’s GDP growth is projected to slightly drop to +1.6% in 2026 and +1.8% in 2027 as the economy gradually returns to its potential growth rates.

Although inflationary pressures are gradually easing, they remain significantly above the 2% target. Overall inflation notably decreased from its 2023 peak of +5.5% to 3.1% in 2024, driven by lower price growth in food and energy, as well as base effects. However, sustained high wage growth, strong domestic demand and a weaker Norwegian krone increased import prices. Consequently, inflation remained elevated at in 2025. The combination of domestic price pressures and stagnant productivity suggests ongoing price pressures on Norwegian food, goods and services. Furthermore, the vulnerability of the NOK, coupled with the interplay between wage formation, inflation and industry profitability, poses a greater challenge to controlling inflation than in other countries. In 2026, we thus expect inflation at +2.2% before reaching the target in 2027. Consequently, Norges Bank is likely to maintain its current interest rate of 4%, possibly cutting it by the end of 2027, if at all. However, if inflation declines more quickly in the coming months, a cut in March or June could become possible. Nevertheless, any changes will be gradual, and given that the economy is growing at a decent pace, there is little reason for policymakers to reduce interest rates significantly. 

Norway offers a robust business environment, excelling in areas such as low market entry barriers, competition, trade and investment. In recent years, the government has introduced several reforms aimed at streamlining contract enforcement. However, there remains an opportunity to further simplify regulatory and administrative burdens on businesses.