State’s net financial assets at record high

For the first time, central government’s net financial assets exceeded NOK 4 000 billion. Both net lending and net holding gains contributed to the increase in net financial assets during the third quarter of 2010.

Central government’s net financial assets are calculated to NOK 4 093 billion at the end of the third quarter of 2010, which is NOK 156 billion higher than at the end of the previous quarter. Central government’s net foreign assets amounted to NOK 2720 billion, while net domestic assets are calculated to NOK 1 373 billion. Nearly half of the state’s financial portfolio was invested in shares and equity at the end of the last quarter. The portfolio of shares and equity comprise both government pension fund’s equity holdings and the central government’s other owner shares in financial and non-financial corporations. The bond portfolio constituted a quarter of total financial assets. Total financial assets amounted to NOK 5 346 billion at the end of the third quarter of 2010, while the central government’s debt totalled NOK 1 253 billion. Almost NOK 589 billion is debt abroad, which to a large extent can be explained by use of repurchase agreements in portfolio management in the Government Pension Fund – Global.

Central government’s net lending increases again

Central government’s net lending summarised over the last four quarters increased again after falling since the fourth quarter of 2008. Central government’s net lending is calculated to NOK 277 billion in the four quarter period to the third quarter of 2010. This is NOK 30 billion higher than in the last four quarter period.

Stabilised development for households’ net lending

Households and non-profit institutions serving households’ borrowing has had a moderate development since the end of 2008. Households’ borrowing amounted to NOK 128 billion in the last four quarter period to the third quarter of 2010. This is nearly in line with the four quarter development for borrowing over the two first quarters of 2010. Households’ investments in financial assets are calculated to NOK 115 billion, which is an increase of NOK 4 billion from the previous to the last four quarter period.

Net lending is calculated to NOK -12 billion in the last four quarter period. This is a small improvement of NOK 3 billion compared to the previous four quarter period. Net holding gains amounted to NOK 43 billion and households’ net financial assets increased by NOK 31 billion in the four quarter period to the third quarter of 2010. Net financial assets are estimated to NOK 297 billion at the end of the quarter.

Local government’s net borrowing increases

The local government’s net lending over the last four quarters is calculated to NOK -22 billion, which is NOK 6 billion lower than the four quarter period to the second quarter of 2010. The development is explained mainly by borrowing, which is almost NOK 7 billion higher than the previous four quarter period. This is due to a higher net incurrence of loans of NOK 3 billion, increased net incurrence of securities by more than NOK 2 billion and net incurrence of other debt increased by NOK 1 billion.

Local government’s net borrowing increased by NOK 20 billion from the end of the second quarter of 2010 to NOK 108 billion at the end of the third quarter of 2010. The development in the third quarter of 2010 is explained by a decrease in financial assets while at the same time increasing their borrowing. At the end of the last quarter, the local government had a total debt of NOK 388 billion.

Net holding gains towards the rest of the world

Norway’s net foreign assets were calculated to NOK 2 293 billion at the end of the third quarter of 2010. This is up by NOK 102 billion from the end of the second quarter of 2010. Norway’s net lending abroad was NOK 64 billion in the last quarter. Net holding gains due to exchange rate developments in foreign exchange and global security markets contributed to increase the net financial assets abroad by NOK 38 billion in the third quarter of 2010.

Source: Statistics Norway

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