Norway Facing Financial Deficit

The Norwegian government said it was running a financial deficit for the second consecutive quarter largely because of declining revenues from petroleum.

The government’s statistics office said total revenue for the third quarter was down 5.1% to $33.1 billion. Accounts for the third quarter show the government is running a deficit of around $2.3 billion and this is the second straight quarter this year the government has run in the red, UPI reported.

“The reduction in the central government’s total revenue is largely explained by a decrease in revenue from the extraction of petroleum,” the government’s statistics office said in a statement.

By its account, tax revenues have been cut in half from the $2.1 billion recorded last year.

Weak economic growth in the latter half of 2016 for Norway has replaced an economic standstill, with gains in home-building and exports expected to provide a lift through early 2017. In September, the country’s central bank said it was keeping its key policy rate unchanged, noting crude oil prices had recovered from historic lows in the first quarter.

Last week, the central bank said profitability in the banking sector was firm, though losses were coming from ties to oil-related sectors.

Statistics Norway, the government’s record-keeping office, said there was a 2.1% decline in cash collections on manufacturing activity from June to August.

Total production of oil and natural gas liquids for Norway was down almost 10%, the Norwegian government said, though some of the decline was not market related. At least one field in Norwegian waters was closed for maintenance.

Statistics Norway said it expects total investments in oil, gas, mining and other parts of the electricity supply will reach $26 billion, a figure that’s 12.3% lower than last year.