Torbjørn Eika, Chief Economist of the Municipal Sector Interests and Employers Organization (KS), is annoyed because I wrote ‘public sector’ instead of ‘public expenditure’ when I wanted to describe the size of the public sector as a share of gross domestic product (GDP) for mainland Norway.
Eika is also upset because the share of government spending in mainland Norway’s GDP tells us nothing important.
He also believes that I am imprecise because I wrote that the proportion, under the revised national budget for 2023, had risen above 62 percent, while this is only a forecast for 2023. In reality, the proportion was still only 61.1 percent. hundred, writes Eika.
I can agree with Eika in most areas.
I should not have written that the share of the public sector in mainland Norway’s GDP exceeds 62 percent. I should have written that the share of public spending in mainland Norway’s GDP is 61.2 percent and could exceed 62 percent in 2024.
But is it important?
I do not believe.
It doesn’t seem like Eika thinks so either.
He points out that the share of public expenditure in mainland Norway’s GDP is not historically high in 2024, as I have asserted, since this figure was even higher in 2020 and 2021.
But Eika, who is clearly a man with a sense of precision, forgets to mention that we had a pandemic at the time and therefore also a lower gross domestic product and higher transfers than we otherwise would have had.
The proportion is now higher than before the pandemic, and has been on an upward trend since 2005, after declining in the years following 1990.
In his annual address in February 2020, the then Governor of the Central Bank said that the fact that the public sector is appropriating an increasingly large share of the resources available in society is a problem, because it reduces space for the growth of new private jobs.
I agree.
I am also concerned about the private sector’s contribution to innovation, productivity development, diversity and checks and balances.
If KS and Eika disagree on this point, that’s interesting.
Kristin Clemet, manager at Civita
