Norway faces significant economic challenges in the longer term, driven by a combination of rising public spending, an expected decline in oil and gas revenues, and an ageing population.

This requires a thorough debate on priorities and reforms to ensure the sustainability of the welfare state.

According to an analysis in Nettavisen, government spending has grown significantly faster than inflation over the past 15 years. Finance Minister Jens Stoltenberg acknowledges the need for long-term control of spending and stresses the importance of prioritising funds, particularly in areas such as defence, basic welfare, health and education.

As spending increases, revenues from oil and gas production are expected to fall significantly from the mid-2030s. Projections suggest that production could be significantly reduced in the decades to come. This decline in petroleum revenues, together with increased spending on pensions and healthcare as a result of an ageing population, will put significant pressure on public budgets.

Economists such as Harald Magnus Andreassen and Kjetil Olsen have warned of these challenges. Professor emeritus of tax law, Ole Gjems-Onstad, believes that increased taxes will not be able to cover the expected income gap and will instead threaten value creation.

He points to the need to reduce public spending and increase productivity. Andreassen emphasises that even if the return on the Pension Fund can contribute, real growth in public spending cannot continue at the same pace as before.

Norway also sends significant sums out of the country every year through various channels. The aid budget for 2025 is estimated at around NOK 53 billion, which constitutes a significant public expenditure item.

In addition, there are private transfers and capital flows to and from abroad. Statistics from Statistics Norway show an ongoing flow of money between Norway and abroad, although it is complex to quantify exact sums for all types of outgoing payments in the specific context of long-term budget balance.

The challenges ahead require a balance between necessary investments, control of expenditure growth and a restructuring of the economy to reduce dependency on oil revenues.

The debate on what reforms are needed to secure the Norwegian welfare state for future generations is expected to continue.