Norway

Stable private and public growth

In 2025, Norway's economy is set to grow at a strong pace, supported by a combination of rising household consumption, increased government spending, and improved hydrocarbon activity. The recovery in private consumption is, in part, driven by wealth effects from higher house prices, which have strengthened household balance sheets. At the same time, government expenditures remain supportive, while the energy sector benefits from sustained hydrocarbon activity.

However, risks persist. High wage growth, fuelled by ongoing labour shortages in certain sectors, continues to pose inflationary pressures. This limits the central bank's ability to cut rates aggressively, with expectations currently pointing to a around two 25 basis point cuts over the course of the year. The tight labour market and persistent inflation concerns could prolong the period of restrictive monetary policy.

In 2025, the number of insolvencies in Norway is expected to rise, reflecting a continued normalisation after an extended period of lower levels. While this increase may appear significant, the absolute number of insolvencies remains within historical levels and should not signal an alarming wave of business failures. At the same time, higher costs will put pressure on firms, contributing to the rise in insolvencies. Wage growth remains elevated, while energy prices continue to be a challenge for cost-intensive industries. However, strong economic activity should keep overall insolvency levels at manageable levels.

Balances helped by hydrocarbon activity

In 2025, Norway’s current account balance is expected to narrow slightly, though it will remain characterized by a substantial goods surplus, primarily driven by hydrocarbon exports. While hydrocarbon production is set to remain strong, the overall trade balance may see some moderation. Meanwhile, the balance of services is likely to persist with a similar deficit or experience a slight increase. A key feature of Norway’s external position remains its consistently high balance of income and current transfers, supported by returns from its significant foreign assets, including the world’s largest sovereign wealth fund.

Norway’s public balance is expected to remain robust, with a continued strong surplus despite rising government spending. Higher revenue, particularly from the hydrocarbon sector, will offset increased expenditures, keeping public debt roughly unchanged. This reflects the country’s stable fiscal position, although, as in previous years, the mainland economy would continue to run a deficit without oil and gas production and related tax income and transfers from the fund.

A tight election is expected in the fall

The next parliamentary election, scheduled for September 2025, is set to be an important one. The current government took office at the beginning of this year after the Centre Party – an agricultural, EU-sceptic party – left the previous coalition due to disagreements over Norway’s future relationship with the EU, particularly on energy policy. As a result, the Labour Party now governs alone, with former Prime Minister and NATO Secretary General Jens Stoltenberg returning as Minister of Finance. Since the split and Stoltenberg’s return, Labour has seen a resurgence in the polls, making the outcome of the autumn election increasingly uncertain.

The external political uncertainty remains a key theme in Norway in 2025, as shifting global dynamics force the country to reassess its strategic priorities. The new American administration to the international stage has increased pressure on Norway to boost defence spending, reinforcing its NATO commitments while also prompting discussions on greater self-reliance. Simultaneously, Norway is reevaluating its relationship with the EU – not only in terms of security cooperation but also regarding its role as a key energy supplier. These evolving geopolitical considerations are shaping both defence policy and the framework for Norway’s energy ties with Europe.

Payment

Bank transfers are by far the most widely used means of payment. All leading Norwegian banks use the BIC/SWIFT electronic network, which offers a cheap, flexible and quick international funds transfer service.

Centralising accounts, based on a centralised local cashing system and simplified management of fund transfers, also constitute a relatively common practice.

Electronic payments, involving the execution of payment orders via the website of the client’s bank, is widely used.

Bills of exchange and cheques are neither widely used nor recommended, as they must meet a number of formal requirements in order to be valid. In addition, creditors frequently refuse to accept cheques as a means of payment. As a rule, both instruments serve mainly to substantiate the existence of a debt.

Conversely, promissory notes (gjeldsbrev) are much more common in commercial transactions, and offer superior guarantees when associated with an unequivocal acknowledgement of the sum due that will, in case of subsequent default, allow the beneficiary to obtain a writ of execution from a competent court.

Debt Collection

Amicable phase

The collection process commences with the debtor being sent a demand for the payment of the principal amount, plus any contractually agreed interest penalties, within 14 days.

Where an agreement contains no specific penalty clause, interest starts to accrue 30 days after the creditor serves a demand for payment and, since 2004, is calculated on the basis of the base rate determined by the Central Bank of Norway (Norges Bank) in effect as of either January 1 or July 1 of the relevant year, raised by eight percentage points.

In the absence of payment or an agreement, creditors may go before the Conciliation Board (Forliksrådet), a quasi-administrative body. To benefit from this procedure, creditors must submit documents authenticating their claim, which should be denominated in Norwegian kroner.

The Conciliation Board then allows the debtor a short period to respond to the claim lodged before hearing the parties, either in person or through their official representatives (stevnevitne). At this stage of proceedings, lawyers are not systematically required. The agreement reached will be enforceable in the same manner as a judgement.

Legal proceedings

If a settlement is not forthcoming, the case is referred to the court of first instance for examination. However, for claims found to be valid, the Conciliation Board has the power to hand down a decision, which has the force of a court judgement.

A case which is referred to the higher court will commence with a summons to appear before the municipal or District Court. The summons will be served on the debtor with an order to give the court notice of intention to defend if he so wishes.

Where a defendant fails to respond to the summons in the prescribed time (about three weeks) or fails to appear at the hearing, the Board passes a ruling in default, which also has the force of a court judgement. The length of proceedings varies from one court to another.

More complex or disputed claims are heard by the court of first instance (tingrett). The plenary proceedings of this court are based on oral evidence and written submissions. The court examines the arguments and hears the parties’ witnesses before delivering a judgment.

Norway does not have a system of commercial courts, but the court of first instance is competent to hear disposals of capital assets, estate successions, as well as insolvency proceedings.

Enforcement of a Legal Decision

A domestic judgment is enforceable for ten years if it has become final. If the debtor does not comply with the judgment, the creditor can request compulsory enforcement of the judgment from the enforcement authorities, which will then seize the debtor’s assets and funds.

Even though Norway is not part of the EU, particular and advantageous enforcement mechanisms will be applied for awards issued by EU countries, such as EU payment orders or the European Enforcement Order, under the “Brussels Regime”. For decisions rendered by non-EU members, they will be enforced on a reciprocity basis, provided that the issuing country is party to a bilateral or multilateral agreement with Norway.

Insolvency Proceedings

OUT-OF COURT PROCEEDINGS

Private non-judicially administered reorganizations are common in Norway; even though they are not regulated by law. Debtors and creditors are free to make any kind of arrangements, but in practice the Debt Reorganization and Bankruptcy Act is often applied. A third party (a lawyer or an accountant) can handle the process if the parties wish it so.

RESTRUCTURING THE DEBT

This procedure can only be initiated by a wiling debtor. His financial situation is assessed with a court-appointed supervisory committee and a composition proposal is prepared. If the court agrees, a composition committee as well as a court appointed trustee will manage the debtors’ operations and formulate a composition agreement. A debt settlement proceeding may result in a completed debt settlement, composition or the commencement of a bankruptcy proceedings.

BANKRUPTCY PROCEEDINGS

Proceedings can be opened by court decision either from the debtor or creditor. The latter must guarantee for expenses related to the proceedings. The court will appoint a trustee and assess the need for a creditor committee prior to issuing a bankruptcy order and given the creditors time to file their claim (three to six weeks). All of the debtor’s assets are confiscated, the debt is assessed and a list of approved claims is established.

If a settlement is not forthcoming, the case is referred to the court of first instance for examination. However, for claims found to be valid, the Conciliation Board has the power to hand down a decision, which has the force of a court judgement. A case which is referred to the higher court will commence with a summons to appear before the municipal or District Court. The summons will be served on the debtor with an order to give the court notice of intention to defend if he so wishes.

Where a defendant fails to respond to the summons in the prescribed time (about three weeks) or fails to appear at the hearing, the Board passes a ruling in default, which also has the force of a court judgement. The length of proceedings varies from one court to another.

More complex or disputed claims are heard by the court of first instance (tingrett). The plenary proceedings of this court are based on oral evidence and written submissions. The court examines the arguments and hears the parties’ witnesses before delivering a judgment.

Norway does not have a system of commercial courts, but the court of first instance is competent to hear disposals of capital assets, estate successions, as well as insolvency proceedings.

Last updated: March 2025