Scope Ratings reviews its ratings either yearly, or every six months in the case of sovereigns, sub-sovereigns and supranational organisations. Monitoring reviews are unrelated to the calendar that outlines public finance rating actions.

Scope performs monitoring reviews to determine whether outstanding ratings remains proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology/ies, latest developments, and the rated entity’s financial and operational aspects relative to similarly rated peers; or through targeted reviews on an individual credit. Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for the Kingdom of Norway (AAA/Stable; S-1+/Stable) on 25 May 2021. This monitoring note does not constitute a rating action nor does it indicate the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated rating history can be found on www.scoperatings.com.

Key rating factors

Norway’s long-term ratings of AAA/Stable are underpinned by the following credit strengths: i) the country’s economic resilience and expected post-crisis fiscal surpluses, ii) a significant net public asset position rather than a net public debt position, driven by savings accumulated through the sovereign wealth fund, Government Pension Fund Global, and iii) strong fiscal, monetary and financial-governance institutions. Norway also benefits from low public debt, issued only to finance capital expenditure, and institutional strengths as a mature economy with one of the world’s highest per capita income levels. Challenges include i) ongoing and growing imbalances in the property sectors, ii) high household debt, and iii) the difficult long-run transition to a non-commodity-dependent economy.

The Stable Outlook represents Scope’s view that risks to the ratings over the next 12 to 18 months are considered balanced. The ratings/Outlooks could be downgraded if, individually or collectively: i) a significant weakening in macroeconomic policy threatens Norway’s long-run net public/external asset positions, ii) a significant financial crisis, potentially exacerbated by domestic imbalances, were to occur, which materially damaged Norway’s public sector and financial system balance sheets, and/or iii) significant shortcomings at addressing climate transition risks arise, resulting in a rapid increase of stranded asset risks.

For the updated scorecards accompanying this review, click here.

The methodology applicable for the reviewed ratings and/or rating Outlooks (Rating Methodology: Sovereign Ratings, 9 October 2020) is available on https://www.scoperatings.com/#!methodology/list.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Eiko Sievert, Director.

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