Norway: Overheating?

Mainland Norway (i.e., not including offshore oil and gas extraction) is booming. Real GDP growth is projected to have reached 3.75% in 2006, and to moderate slightly in 2007 and 2008 reflecting the completion of major oil investment projects, reduced monetary stimulus and slowing household demand. Although the output gap has become increasingly positive, underlying inflation has remained relatively low and below the Norges Bank target.
After more than three years of growth above potential, there are signs of overheating. Rising bottlenecks and increasing risks of wage inflation call for a stricter fiscal policy, a faster return to a neutral monetary stance and new reforms to boost labour supply.
Population (000s), 20054 623
Area (000 sq km)324
CurrencyKrone
GDP (Billion USD), 2005199.5
Life expectancy at birth (Women, Men), 2004 82.3, 77.5
Total labour force (000s), 20052 400
Government typeConstitutional Monarchy
Indicators% change unless otherwise indicated
200620072008
GDP growth2.43.22.7
Household savings ratio5.25.65.9
Consumer price index2.21.72.6
Unemployment rate (%)3.63.33.4
General government financial balance
(% GDP)
19.318.018.1
Current account balance (% GDP)20.020.221.5
Source: OECD©OECD Observer No. 258/259, December 2006


Economic data

GDP growth: +0.2% Q4 2019
Consumer price inflation: 1.7% March 2020
Trade (G20): -0.1% exp, -1.3% imp, Q4 2019
Unemployment: 5.6% March 2020
Sharp drop in OECD leading indicators point to darker outlook: Last update: 14 May 2020

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