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2008 OECD Economic Surveys: Norway 2008

image of OECD Economic Surveys: Norway 2008

The OECD's periodic review of Norway's economy.  It finds that Norway has seen several years of strong growth and very low unemployment, but that it will not be untouched by the current slowdown.  The survey examines three key economic challenges: policies for a soft landing, the labour market and immigration, and making the best of Norwegian schools.

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Maintaining prosperity while dealing with overheating and labour supply constraints

The Norwegian mainland economy has expanded at a surprisingly strong pace since the 2007 Economic Survey, generating substantial real income gains, robust consumption growth and near full employment for its citizens. Favourable developments in world demand for key Norwegian exports and declining prices for many of its imports have played their part in this success. Macroeconomic policy has been tightened progressively, mostly through a long series of interest rate increases up to spring 2008 but also through a degree of fiscal restraint in 2007, and the economy seems to have started to slow in early 2008. Pressure on the labour market shows in rising wage inflation and increasing inflows of foreign labour while, paradoxically, there is only slow progress in dealing with aspects of labour and welfare policy that seem to restrict the supply of labour. Despite strong demand for labour, the compulsory education system performs rather poorly compared with many of Norway’s partners.

English

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