The Norway, similar to other Scandinavian countries, enjoys high standard of living and high levels of prosperity. The main reasons behind this are that Norway has a productive and adaptable economy, a high labour force participation rate and an equitable income distribution. The economical and social model of the country is characterised by a comprehensive public welfare state, high public investments in education and close cooperation between the government and the social partners. The Norwegian economy can be fairly characterized as a significant example of welfare capitalism, featuring a combination of free market activity and government intervention. This combination can be delineated by the fact that on the one hand the Norwegian government controls key areas, such as the vital petroleum sector, through large-scale state enterprises. On the other hand Norwegian economy is a free market economy with low trade barriers. This is the economical dipole that delineates the socio-economical situation of the country.

A significant share of the Norwegian economy consists of service industries, including wholesale and retail trade, banking, insurance, engineering, transport and communications and public services. In 2008, the service sector as a whole accounted for approximately 48% of GDP. Norway’s petroleum industries, including exploration and extraction, accounted for 26% of GDP and about 49% of exports. Manufacturing accounted for close to 9% of GDP.

Economic growth has been the case since 1970, as annual economic growth has been of an averaged 3.4%. Furthermore, Norway experienced a strong economic expansion from 2003 to 2007, with an annual average GDP growth of 5%. The aforementioned economical situation reached its peak in 2007 when GDP growth reached 6%. The aforementioned tendency continued in 2008, although the GDP growth was significant lower (3.2%). The economic development also resulted in the reduction of unemployment which reached a 20-year low of 2.4% in the third quarter of 2008.

In 2009, the trend was averted as the Norwegian economy experienced an economic downturn that is estimated to result in a shrink of the GDP of the country by 1% in the end of the year. Of course, it is regardless to say that international economic recession was the main reason behind the aforementioned economic decline. From the last quarter of 2008 Norwegian economy experienced a slowdown in housing investments. A decline in demand for consumer durables followed, and there was a clear downward shift in consumption. The aforementioned phenomenon continued during 2009. However, the results of the economic crisis have not been as severe in Norway as in most other countries. The main reason behind this is the strong demand impetus from both fiscal and monetary policy measures that are expected to limit the downturn and private consumption.

As it is already mentioned, Norwegian economy is an economy with low trade barriers. This is highlighted by the fact that the country’s per capita foreign trade is among the highest in the world. In 2008, total exports represented 47% of total GDP whereas imports represented 29%. The main products that are exported are Crude oil and natural gas that represents about half of total merchandise exports in 2008. Due to the global economic recession, Norwegian exports of traditional goods fell in the second half of 2008. The largest reduction was in metals, refined oil products and basic chemicals, whereas ship and offshore-related exports was more stable. The aforementioned trend was also continued in the first quarters of 2009, especially for metals and basic chemicals which were down 10% from the previous quarter.

The socio-economical environment of the Norwegian economy is undoubtedly one of the most robust globally. The development of a policy of a strong and sustainable public sector and a long-term management of national wealth helped the country to develop a diachronically situation of high employment and sustainable development. The global economic recession, though created a serious downturn a fact that should only be regarded as a small differentiation in the positive course that the Norwegian economy has the last decades.