Norway has been more successful than many countries in limiting the spread and impact of COVID-19. The country has maintained good outcomes on many economic and social indicators. GDP per capita remains among the highest in the OECD. However, there are challenges in sustaining good outcomes amid post-pandemic economic adjustment, continued population aging and the urgency of tackling climate change. Labour force participation needs to increase to ensure the high levels of employment that are key to Norway’s socio-economic model. Higher productivity growth is essential for businesses to remain competitive. Meanwhile, economic activity must continue to adjust to achieve a faster decline in greenhouse-gas emissions.

Housing in Norway has become even more expensive following a new surge in prices during the pandemic. This has further raised risks to macro-financial stability from elevated mortgage debt. Strong price growth has also made it harder for first-time homebuyers to enter the market. Many renters meanwhile devote a large proportion of their income to paying for housing. Fixing distortive taxation of dwellings will be essential to improve affordability, as will greater focus on the supply of housing.

SPECIAL FEATURE: HOUSING AFFORDABILITY