Economic activity is projected to be weak in 2016 as petroleum investment falls, with spillovers on non-oil sectors. Output growth will pick up gradually as non-oil investment strengthens with improved external demand, aided by currency depreciation, and as new oil-investment projects commence. Unemployment will peak in 2016. Inflation will drift down as currency-depreciation effects wane and economic slack continues.
Monetary and fiscal policies should remain supportive. Appropriately, macro-prudential tools are being used to contain risks from the housing market and high household debt. A tax-mix that encourages business activity through heavier reliance on indirect taxation would promote transition to broader-based growth. Reforms of the sickness and disability programmes aimed at encouraging labour supply are important for inclusive growth and need to continue.
Enhancing skills is key to improving Norway’s productivity and well-being. Improvements in the quality and completion rates of secondary and tertiary education, including through measures to enhance teacher qualifications and better monitor the quality of outcomes, are essential. Further reductions in red tape and improved public-sector efficiency would also bolster productivity.
Economic Survey of Norway (survey page)
The Economic Consequences of Brexit: A Taxing Decision (main web page with paper)
Structural reforms in a difficult time (blog + paper)
Public spending efficiency in the OECD (blog + paper)