Excess demand pressures

Click on the globe for Key Economic Forecast & Indicators

A domestic-demand-led recovery is gaining momentum, based on strengthened oil investments, low interest rates and an expansionary fiscal policy. The negative output gap is expected to reverse in 2005.
The external sector should start contributing positively to growth. Core inflation is projected to rise as a result of excess demand, but is expected to reach the middle of the range targeted by the Central Bank only by end-2006.Monetary policy should be geared towards reaching the inflation target by maintaining low interest rates throughout the projection period. Fiscal policy should return rapidly to the fiscal rule (structural non-oil deficit equal to the expected real return on the petroleum fund over time) to help avoid overheating and appreciation of the krone, and to contribute to a more equitable use of oil resources over time.
Population (000s), 20034 564
Area (000 sq km)324
GDP (Billion USD), 2003220.9
Life expectancy at birth (Women, Men), 2002 81.5, 76.4
Total labour force (000s), 20032 375
Government typeConstitutional Monarchy
Indicators% change unless otherwise indicated
GDP growth3.23.22.9
Household savings ratio7.57.77.8
Consumer price index0.51.92.1
Short-term interest rate (%)
Unemployment rate (%)
General government financial balance (% GDP)8.210.511.4
Current account balance (% GDP)14.216.316.4
Source: OECD© OECD Observer No 245, November 2004

Economic data


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