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- GDP (PPP):
- $277.1 billion
- 3.0% growth
- 0.6% 5-year compound annual growth
- $55,009 per capita
- Inflation (CPI):
- FDI Inflow:
Norway’s economic freedom score is 70.9, making its economy the 32nd freest in the 2014 Index. Its score has increased by 0.4 point since last year, with improvements in investment freedom, the management of government spending, and monetary freedom partially offset by declines in freedom from corruption and business freedom. Norway is ranked 16th out of 43 countries in the Europe region, and its overall score is well above the world and regional averages.
Norway was first rated in the 1996 Index and since then has advanced its economic freedom score by 5.5 points. Improved scores for half of the 10 economic freedoms, led by notable gains in the area of market openness measured through trade freedom, investment freedom, and financial freedom, have enabled Norway to prosper despite declines in fiscal freedom, labor freedom, and monetary freedom. Norway’s economy, recording its highest score ever in the 2014 Index, is now considered “mostly free.”
Norway’s strong competitiveness is built on flexibility and openness. The economy continues to be a world leader in several of the 10 economic freedoms including trade freedom, property rights, and freedom from corruption. The sound regulatory environment encourages entrepreneurial activity and innovation. Commercial operations are handled with transparency and efficiency.
Prime Minister Jens Stoltenberg heads a labor–socialist government. Norway has been a member of NATO since 1949, but voters have twice rejected membership in the European Union; the country instead interacts with EU members under a European Free Trade Association agreement. Norway is one of the world’s most prosperous countries. Fisheries, metal, and oil are the most important commodities. Norway saves a large portion of its petroleum-sector revenues, such as dividends from the partially state-owned Statoil and taxes from oil and gas companies operating in Norway, in its Government Pension Fund-Global.
Norway remains one of the world’s least corrupt countries. Well-established anti-corruption measures reinforce a cultural emphasis on government integrity. Transparency is a key institutional asset. The judiciary is independent, and the court system, headed by the Supreme Court, operates fairly at the local and national levels. Private property rights are securely protected, and commercial contracts are reliably enforced.
The top individual income tax rate is 47.8 percent, and the top corporate tax rate is 28 percent. Other taxes include a value-added tax (VAT), a tax on net wealth, and environmental taxes. The overall tax burden equals 43.2 percent of gross domestic income. Government spending equals 44 percent of GDP, and public debt equals 34 percent of the domestic economy. Public finances are partially funded by a $750 billion sovereign wealth fund.
The overall regulatory framework is transparent and competitive. Launching a business is subject to minimum capital requirements but takes only five procedures. Bankruptcy procedures are modern and efficient. Labor regulations are relatively rigid, and the non-salary cost of employing a worker is high. Monetary stability has been well maintained, although the government subsidizes numerous renewable energy projects.
Norway has a low 0.5 percent average tariff rate. There are few government barriers to international trade and investment, but investment in some sectors may be screened. The financial sector is market-driven, although the state retains ownership of the largest financial institution. Supervision of the banking sector is prudent, and regulations are largely consistent with international norms. Credit is allocated on market terms.