OECD Economic Surveys: Norway 2026

Hansjörg Blöchliger

Norway’s integration into global value chains (GVCs) – broadly defined as cross-border trade in intermediate goods and services - has deepened over the past three decades (Figure 3.1, panel A). GVC-related trade expanded rapidly during the early 2000s, rising by about five percentage points, while trade involving products crossing only a single border correspondingly dropped. Historically, Norway has relied more heavily on GVC trade than the average OECD economy, though this gap has narrowed over time. The high share of intermediate goods in Norway’s imports largely reflects its role as an upstream commodity exporter, especially in oil and gas, a pattern underscored by the surge in export intensity around 2022 (Figure 3.1, panel B). Import intensity is hovering at around 15-20%, with the decline in traditional industrial sectors and agriculture offset by the growth in information technology and services. Longer-term effects on trade of the COVID-19 pandemic, rising geopolitical tensions and events in the middle east have yet to materialize.

Norway’s distinctive position within GVCs becomes clearer when viewed through the lens of foreign market reliance (FMR or exports to downstream industries) and foreign input reliance (FIR or imports from upstream industries) (Figure 3.2). Norway’s dependence on foreign inputs is lower than that of most OECD economies, while its exposure to foreign export markets ranks among the highest. This combination of low FIR and high FMR is characteristic of countries specializing in extractive industries—such as Australia or Chile— whose economies are strongly linked to global demand for commodities. As for most OECD economies, intra-OECD trade in intermediate goods dominates Norway’s GVC activity, with commodity exports flowing primarily to European partners. Trade in value added with China and the United States accounted for approximately 9% (rising from around 3% in 2019 mainly due to a hike in rare earth imports) and 3% percent of Norwegian GVC trade in 2022, respectively. With relatively modest input reliance and a considerable share of exports difficult to substitute, Norway appears less vulnerable to GVC risks than most other OECD countries. Small and medium-sized enterprises are comparatively better integrated in GVCs than in the OECD average (OECD, 2023).

A rising share of trade in value added with non-European countries reflects growing GVC vulnerabilities (Figure 3.3). While Norway’s share of exports to the European continent has hovered at around 80%, the share of Norwegian goods consumed in Europe has gradually declined from 65% to 55% or less. This decline reflects the growing share of intermediate Norwegian goods exported further, for instance basic metals and car parts for the auto industry whose products are exported beyond Europe and the realm of Norwegian free trade agreements (it also reflects the growing share of industrial versus household energy consumption in Europe). On the import side, the share of imports and of value added imported from Europe has declined in tandem, again reflecting the rising importance notably of China as well as other Asian countries in Norwegian imports.

The breakdown of imports and exports by sector again highlights Norway’s relatively low exposure to GVC risks (Figure 3.4). The country appears less dependent on strategic value chains essential for meeting basic needs—such as food and healthcare—or for the supply of critical inputs for a wide range of industries, including mining products and metals. Likewise, Norway’s reliance on sensitive IT components, such as semiconductors - which in recent years have faced both surging downstream demand and severe upstream supply disruptions - remains below the OECD average. Moreover, Norway’s role as a hub for seafood production and trade (not shown in Figure 3.4) further shields this sector from vulnerabilities (de Oliveira Paes, Gjesvik and Melchior, 2024). Norway was subject to Chinese salmon import restrictions, with little discernible effect, when the Nobel Peace Prize in 2010 was awarded to Liu Xiaobo (Chen and Garcia, 2016).

Norway stands out as having the most diversified – or least vulnerable—supply chains in the OECD, sourcing around 38% of all vulnerable products from three countries: China, Germany and Sweden (Figure 3.5, panel A). China alone accounts for only around 16%, the lowest share of all OECD countries. Similarly, the share of products deemed vulnerable is much below the OECD average, with only around 1% of all products deemed highly vulnerable (Figure 3.5, panel B). A recent Norwegian study confirms this resilience, finding that Norway faces low exposure through its supply chain networks (de Oliveira Paes, Gjesvik and Melchior, 2024). Risk appears to be concentrated in a small minority of value chains such as critical raw materials, essential medical equipment, pharmaceuticals and semiconductors (Schwellnus et al., 2023). In these areas, risk mitigation strategies like diversifying suppliers or investing in technological innovation to substitute inputs, could justify significant upfront costs, temporary productivity losses, or higher production expenses. Since Norway is already very diversified, such strategies would need to demonstrate large benefits given the high upfront costs.

Norway’s relatively low exposure to GVC risks has made for an open, decentralized and flexible approach to risk management, granting significant responsibility to businesses, local authorities and individual government agencies. Free trade and open markets, including for foreign investment, remain central to this framework. GVCs are viewed as beneficial as they foster specialization, drive innovation, facilitate knowledge exchange and enhance purchasing power. However, Norway recognizes that vulnerabilities arise when critical sectors involving national interests are affected (Government of Norway, 2025). In a context of growing geopolitical tensions and potential trade disruptions, there is scope to strengthen risk management by leveraging macroeconomic tools, improving monitoring systems and promoting diversification through innovation and skills development. The benefits of these measures must be carefully balanced against their costs and the limited capacity of a small open economy to reshape global value chains.

Monetary and fiscal policies form the first line of defence when the economic impact of a GVC disruption—whether on exports or imports—unfolds. In a well-designed macroeconomic framework, the government and/or the central bank act swiftly, deploying fiscal and monetary tools to cushion a shock and stabilize the economy. For Norway, whose economy is more exposed to the vagaries of global commodity markets than most OECD countries, having a policy framework that responds quickly to shifts in the global landscape is key.

Norway’s macroeconomic framework is robust, allowing rapid and effective policy responses while safeguarding long-term sustainability (OECD, 2024). Fiscal space is vast, with the sovereign wealth fund—the Government Pension Fund Global—amounting to roughly 400% of GDP at the end of 2025. The fiscal rules ensure these resources can be mobilized quickly when shocks like COVID-19 hit. Historically, fiscal policy has been responsive to economic cycles, though its countercyclical strength has weakened somewhat in recent years. The central bank can also react swiftly: after the onset of the COVID-19 crisis, it cut the policy rate from 1.5% to 0% within weeks. It also intervenes in foreign exchange markets to stabilise the krone. Norway’s institutions rank among the strongest in the OECD, ensuring that crisis measures are perceived as fair and balanced. High public trust further supports effective policy implementation. For further analysis and recommendations on monetary and fiscal policies see Chapter 1.

Norway’s GVC risk management is embedded within a broad architecture that comprises civil protection and emergency preparedness; sector-specific supply resilience in health, energy and defence; and trade and industrial strategies (Box 3.1). The “Total Preparedness Report” (Totalberedskapsmeldingen), published in 2024, sets out a comprehensive, coordinated response to emergencies (Government of Norway, 2024). Among its priorities are “secure supply chains and food security” and “strengthen digital resilience and control over critical infrastructure”, for instance the electricity grid. Local and regional preparedness are to be bolstered, coordination both across functions and business sectors improved and Nordic cooperation deepened. Working groups or “preparedness councils” involving representatives from the business sector, ministries and voluntary organisations are the key institutions for co-operation. The use of business sector expertise guarantees detailed knowledge about sectors and products and helps to monitor and assess supply risks. Reflecting Norway’s decentralised system, similar councils operate at the regional and local levels.

One of the consequences of the Total Preparedness Report was the establishment of a new unit for economic supply and business preparedness (Ministry of Trade, Industry and Fisheries, 2024). This unit is responsible for coordinating the work across sectoral ministries, identifying market failures potentially requiring government action, and facilitating cooperation with businesses. A key objective is to ensure coherent planning across sectors. In addition, the ministry has a special responsibility for food, fuel, building and construction preparedness, accommodation and services, such as maritime transport. In the proposal for the national budget for 2026, the government has proposed that the Directorate for Civil Protection and Emergency Planning should assist the ministry in the coordination work. Such coordination aligns broadly with the OECD Recommendation on the Governance of Critical Risks (OECD, 2014).

GVCs can be affected by several risks at a time such as foreign export restrictions; decreased access to foreign markets due to import tariffs; competition from subsidised foreign industries; and others. Against this background, the government should monitor supply vulnerabilities and their macroeconomic, systemic and security implications. It should analyse the costs and benefits of policy intervention and disseminate the respective information, as is done in the Netherlands (Box 3.2). The government should further strengthen its supervising and coordinating role in GVC risk management. It should standardise risk management based on a few unified principles; further develop consistent scenarios and contingency plans to deal with risks and vulnerabilities. Furthermore, establishing codes of conduct and harmonising the collection of public and private sector data to track GVC developments may be warranted (OECD, 2020). While firms can assess risks within their own global value chains, they may overlook systemic disruptions affecting entire industries or markets, potentially warranting policy intervention (Acemoglu et al., 2012).

Inventories of critical goods are among the most common policy tools to strengthen supply chain resilience, as they help bridge temporary shortages (Crowe and Rawdanowicz, 2023). Examples include Australia’s National Medical Stockpile, Canada’s National Emergency Strategic Stockpile and the US Strategic National Stockpile, which hold essential medical supplies. International Energy Agency members maintain oil reserves covering at least 90 days of net imports (being a net exporter Norway is exempt but maintains reserves covering 20 days on a voluntary basis), while natural gas storage proved vital for Europe after Russia’s invasion of Ukraine. For many products, storage costs are relatively low compared with alternatives such as substitution. Finland and Switzerland, two small open economies, operate sophisticated inventory systems (Box 3.3).

The Norwegian government has recently strengthened security of supply measures notably in the following areas (Government of Norway, 2024):

• Food and agricultural products: The Food Security Strategy highlights vulnerabilities in fertilizer, seed and grain supply chains, especially due to the war in Ukraine. In 2025 the government reintroduced requirements for grain storage, which had been abandoned in 2003. The government also explicitly aims at strengthening self-sufficiency in agriculture.

• Medical Supplies and Pharmaceuticals: The COVID-19 pandemic exposed weaknesses in the supply of personal protective equipment, vaccines and essential medicines. Norway maintains strategic stockpiles and has strengthened domestic production capabilities in this sector.

• Energy and Fuel: although Norway is a major exporter of oil and gas, it remains vulnerable to refined fuel supply disruptions and electricity cuts. The government is investing in strengthening grid resilience and requires hydropower generators to store minimum amounts of water to address emergencies or disruptions. Importers and producers of petroleum products are also required to store minimum petroleum reserves that can be immediately released.

The list of stockpiled items and their quantity is continuously reviewed by the preparedness councils at the national, regional and local level. The government usually compensates private businesses if it requires them to provide stocks. For goods considered essential, the current stockpiles can maintain the country’s demand from 20 days (petroleum products) to around three months (wheat) in case of a “full stop” in imports (Government of Norway, 2024). The government is also running regular campaigns for self-preparedness and private stockpiles of food and water, medical and hygiene products, energy and information.

Maintaining inventories - which amounts to maintaining excess capacity - can be costly, lead to waste and create inefficiencies. Stockpiling for every specific event is difficult, as highlighted during the COVID-19 crisis, and severe or prolonged disruptions will exhaust even large inventories. Conversely, stockpiling to increase self-sufficiency may be misleading if security of supply is high, e.g. if stockpiled products can easily be substituted or alternative sources of supply can be found. Compulsory stocks may create “moral hazard” – companies and households hold less inventories than they otherwise would – leaving overall economic resilience unchanged while increasing the burden for the public sector. Against this background, the list of items in compulsory stockpiles should remain focussed on essential and difficult-to-replace goods and their assessment should rely on indicators of risk and security of supply.

Diversification through deeper international trade would increase Norway’s resilience against GVC shocks, as domestic companies will be able to widen their access to foreign markets (Schwellnus, Haramboure and Samek, 2023). Diversified supply chains are a better means to secure supply than protectionism and self-sufficiency. Effective trade costs are higher in Norway than the OECD average and the Nordics, notably in highly subsidised agriculture (see macro chapter) and some service sectors (Figure 3.6). Although greater GVC integration can heighten an individual company’s exposure to shocks, the economy at large benefits from removing trade barriers and lower trade costs, notably in the form of smaller GDP volatility (IMF, 2022). Lowering trade barriers makes markets “thicker”, by expanding the number of possible suppliers and buyers, helping companies to deal with supply-related risks once they occur. NordPool, the power exchange covering the Nordic countries, demonstrates the mutual benefits of integrated markets in enhancing economic resilience and ensuring stable service delivery (OECD, 2024).

Lower trade costs can be achieved by signing new free trade agreements (FTAs) and deepening existing ones. In addition to the EEA agreement, Norway has concluded 38 FTAs with countries or regional blocs worldwide, typically in coordination with its EFTA partners Switzerland, Iceland and Liechtenstein. As of the start of 2026, an additional agreement is under negotiation with Vietnam. As a result, Norway’s trade with non-European partners, particularly in Asia and the Americas, has grown steadily since 2010 (Figure 3.3). Deepening FTAs, especially with the European Union, could further reduce trade costs and enhance Norway’s ability to adapt to future disruptions by enabling firms to diversify suppliers. Existing and future agreements could also incorporate provisions on supply security and maintaining open trade during crises. For example, the Australia–Japan FTA includes commitments to avoid measures that would restrict energy and mineral supplies in the event of shortages. A more radical option would be the unilateral elimination of all tariffs on industrial goods, as Switzerland did in 2024.

Improving trade facilitation can further reduce barriers and lower trade costs. Procedures for customs clearance and the accessibility of trade-related information significantly influence these costs. Small and medium-sized enterprises tend to benefit more than large firms from such improvements, enabling them to diversify supply chains more effectively (López González and Sorescu, 2019). While Norway ranks among the top performers in the OECD, there is still room for progress in areas where it falls below the OECD average. This is particularly the case by engaging the trade community more actively, providing clearer advance rulings and ensuring greater discipline in applying charges and fees to imports and exports. Improving trade facilitation could also foster foreign direct investment, whose share in GDP is relatively low, notably because of a high share of public ownership in the energy sector (see macro chapter).

Norway’s R&D spending as a share of GDP remains below the OECD average and lags other Nordic countries (Figure 3.8). While this partly reflects Norway’s commodity-based economic structure, boosting R&D could help reduce dependence on the commodity sector, lower exposure to geographically concentrated suppliers and foster diversification (for example, high lithium prices have over the past few years fostered research on and development of batteries with lower lithium content). Against this backdrop, the public sector could expand funding for cutting-edge research enabling firms to improve production processes, enhance monitoring systems and strengthen supply chains. Given the high costs and inherent uncertainty of innovation, closer coordination and joint programmes with Nordic and EU partners, combined with corporate co-financing, would help scale up domestic R&D efforts and accelerate technological progress. Finally, Norway should invest more in technical and managerial skills development, as higher‑skilled workers may be better able to retool production processes, have greater knowledge of the company’s supplier network beyond its immediate partners and implement more prudent inventory management strategies (Schwellnus, Haramboure and Samek, 2023).

As a small open economy, Norway should avoid new distortive industrial policies and trade restrictions, above all because they tend to be costly with few benefits. The country already spends more on subsidies than the OECD average (OECD, 2024), and they increased by around 50% since 2020 (see macro chapter). Participation in a costly and ineffective subsidy race could result in overcapacity and stranded assets, fuel protectionism and impair international co-operation. Selecting companies eligible for support (“picking winners”) may prove difficult, lead to market distortions, waste of public resources and risk capture by special interests. In addition, the fiscal cost might be unduly high. Norway’s economic success rests on openness to trade, a sound macroeconomic framework and strong private markets supported by trusted institutions. Preserving and expanding these foundations is key.

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