Kristin Clemet points out in a comment in Aftenposten on June 12 that the public sector accounts for 62% of mainland Norway’s gross national product (GDP) and that this share has never been higher. His figures cannot refer to value creation in the public sector, which would have been natural, but probably apply to public spending. These expenditures consist largely of transfers to individuals, who primarily purchase goods and services from other individuals. In addition, the state and municipalities also buy a lot from the private sector.
The fact that public sector expenditure measured as a percentage of continental GDP is an uninformative figure is illustrated by the fact that household expenditure is higher than that of the public sector. If we add in spending by nonprofits, businesses and foreigners in Norway, we come to well over 100%, perhaps closer to 200% of the continent’s GDP.
A more relevant measure of the share of the public sector in the economy is the share of their value creation in relation to total value creation, i.e. GDP. Over the past four quarters, value creation in the public sector has amounted to just under 24.8% of GDP for mainland Norway. This proportion peaked in the first four quarters of the pandemic (2020/2021) at 26.4% and has not decreased since 2015. In the last six years (2016-2021) of bourgeois governments, the proportion was therefore higher than today.
Torbjørn Eika,
Chief Economist, Municipal Interests and Employers Organization
