Press Release
Ministry of Finance

10. mai 1995

Revised National Budget 1995:

The Norwegian economy and the Convergence criteria of the Maastricht-treaty [1]

Criterion 1:

General government net borrowing should be less than 3 per cent of GDP:

Norway:
General government net lending is projected to be 1.5 per cent of GDP in 1995.

Criterion 2:

General government gross debt should be less than 60 per cent of GDP.

Norway:
General government gross debt was equal to 48 per cent of GDP at the end of 1994. At the same time general government will have net financial assets of approximately 26 per cent of GDP if direct investments in state enterprises are capitalized.

Criterion 3:

Inflation rate (observed over the last twelwe months) should not exceed the inflation rate in the three EU member countries with the lowest inflation rates by more than 1.5 percentage points.

Norway:
Average inflation rate was 1.8 per cent in the twelve month period until March 1995 (as measured against the preceding twelve month period), against 1.8 per cent for the relevant EU member countries.

Criterion 4:

The nominal long term interest rate of government bonds (observed over the last twelve months) should not exceed that of the three EU member countries with the lowest inflation rates by more than 2 percentage points.

Norway:
The average effective interest rate of government bonds over the last twelve months until the end of March 1995 was 7.5 per cent, against an average of 8.0 per cent in the relevant EU member countries.

Criterion 5:

The currency should have been kept within the normal fluctuation margins provided for by the Exchange Rate Mechanism of the EMS for at least the last two years.

Norway:
Norway is not an EMS member, and can therefore formally not fulfill this criterion. The currency was devalued in May 1986. From May 1986 until 10th December 1992 a fixed exchange rate was maintained, first towards a weighted average of the currencies of Norway's main trading partners, and from 22 October 1990 towards the ECU, with only small deviations (0 to minus 0.5 percentage points) from the established central value against ECU. The currency has been floating since 10th December 1992. After an initial depreciation of approximately 3-4 per cent compared to the earlier central value against ECU, the exchange rate has been relatively stable.

---

1. Norway is not a member of the EU.

---

Kontaktperson:
Informasjonssjef Janne-Gro Rygg, tlf: 22 34 41 09, priv: 22 92 15 94, personsøker: 966 82238

---

Lagt inn 27 juli 1995 av Statens forvaltningstjeneste, ODIN-redaksjonen