Norway is one of the world's richest countries in per capita terms. It has an important stake in promoting a liberal environment for foreign trade. Its large shipping fleet is one of the most modern among maritime nations. Metals, pulp and paper products, chemicals, shipbuilding, and fishing are the most significant traditional industries.
Norway's emergence as a major oil and gas producer in the mid-1970s transformed the economy. Large sums of investment capital poured into the offshore oil sector, leading to greater increases in Norwegian production costs and wages than in the rest of Western Europe up to the time of the global recovery of the mid-1980s. The influx of oil revenue also permitted Norway to expand an already extensive social welfare system. Norway has established a state Petroleum Fund that exceeded $388 billion by the end of December 2007. The fund is primarily designed to help finance government programs once oil and gas resources become depleted. Norway is currently enjoying large foreign trade surpluses thanks to high oil prices. Although Norway’s unemployment rate has had a slight increase due to the international credit crisis, it still remains low (2.8% range). As yet, the country does not have a significant industrial or manufacturing base and, in banking and financial services, the country is in the process of liberalizing and consolidating the industry. Norway's restricted labor market has limited the country's ability for mainland growth, although growth in the service sector has been stronger than in manufacturing. Labor costs have increased at a rate higher than its major trade rivals, causing a continued loss in Norway's competitive advantage. The Organization for Economic Cooperation and Development (OECD) has applauded Norway’s strong economy. Growth was expected to continue in 2008.
Norway voted against joining the European Union (EU) in a 1994 referendum. With the exception of the agricultural and fisheries sectors, however, Norway enjoys free trade with the EU under the framework of the European Economic Area. This agreement aims to apply the four freedoms of the EU's internal market (goods, persons, services, and capital) to Norway. As a result, Norway normally adopts and implements most EU directives. The present government has agreed not to open the question of full membership in the EU during the 2005-2009 legislative term. Norwegian monetary policy is aimed at maintaining a stable exchange rate for the krone against European currencies, of which the euro is a key operating parameter. Norway is not a member of the EU's Economic and Monetary Union and does not have a fixed exchange rate. Its principal trading partners are in the EU; the United States ranks sixth.
Information by U.S. Department of State
