Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Norway - statistics & facts
When Russia stopped deliveries of natural gas to Europe through the North Stream I in 2022, Norway became the largest deliverer of natural gas to the EU via pipelines. The petroleum industry has played a predominant role in Norway’s economic development, and today, the Scandinavian country is a major global exporter of oil and gas, contributing to the country’s renowned welfare system. But the future of the welfare state is uncertain with an aging population, and climate change has led to some people calling for Norway to phase out the petroleum industry.
Most of the revenues from the petroleum sector are reinvested via the Pension Fund to secure welfare for future generations. Today, it is the most valuable wealth fund worldwide. Partly due to the Pension Fund, but also due to political priorities made through the previous decades, Norway has developed a strong welfare state, with free universal health care, free education even at higher levels, and financial safety for people incapable of working.
Moreover, in order to reduce global warming, activists, experts, and politicians alike have called for the Norwegian government to phase out its petroleum activity and to stop drilling for new oil and gas fields. This would of course not have an immediate effect on Norway’s welfare state, as it would take decades before the existing fields are empty and because most of the revenues already are invested in the Pension Fund. However, Norway will have to diversify its economy away from its reliance on oil and gas. This process has already started, and Norway has a diversified modern economy. Nevertheless, a transition away from the petroleum era will be a significant challenge for the Scandinavian country.
One of the richest countries in the world
Over the past decades, particularly since oil was found in the Northern Sea in 1969, Norway has developed a strong economy, today being one of the countries with the highest gross domestic products (GDP) per capita worldwide. The economic development has led to a high standard of living. Norway ranks second in the United Nation's Human Development Index, second in terms of gender equality, and is considered to be one of the happiest countries in the world according to the World Happiness Index.Most of the revenues from the petroleum sector are reinvested via the Pension Fund to secure welfare for future generations. Today, it is the most valuable wealth fund worldwide. Partly due to the Pension Fund, but also due to political priorities made through the previous decades, Norway has developed a strong welfare state, with free universal health care, free education even at higher levels, and financial safety for people incapable of working.
Welfare state under pressure
In the coming years, the Norwegian welfare system faces numerous challenges. As in many other developed countries, Norway is facing an aging population, owed to declining fertility rates and people living longer. This means that, over the next decade, more people will leave the country’s labor force than people entering it, resulting in a shrinking labor force. Accordingly, the Norwegian welfare state, which relies on a large workforce, faces a challenge to sustain its offer, particularly within health and social care.Moreover, in order to reduce global warming, activists, experts, and politicians alike have called for the Norwegian government to phase out its petroleum activity and to stop drilling for new oil and gas fields. This would of course not have an immediate effect on Norway’s welfare state, as it would take decades before the existing fields are empty and because most of the revenues already are invested in the Pension Fund. However, Norway will have to diversify its economy away from its reliance on oil and gas. This process has already started, and Norway has a diversified modern economy. Nevertheless, a transition away from the petroleum era will be a significant challenge for the Scandinavian country.
A solid basis to face future challenges
As one of the richest countries in the world, with high living standards, the most valuable wealth fund worldwide, and a solid welfare system, Norway is considered among one of the best countries to live in. However, the Scandinavian country faces challenges over the next decades, with an aging population and the transition away from an economy dominated by the petroleum industry. With it’s Pension Fund, high living standards, and highly educated population, Norway is in a good position to manage these challenges.
